Title 15 — Commerce and TradeRelease 119-73not60

§3905 Clarification Concerning Permissible State Authority

Title 15 › Chapter 65— LIABILITY RISK RETENTION › § 3905

Last updated Apr 3, 2026|Official source

Summary

Risk retention groups and purchasing groups must follow State rules for auto no-fault and motor vehicle financial responsibility insurance. The chapter only covers liability insurance. They cannot sell or buy other types of insurance, and their policies cannot provide coverage that State law bans or that the State’s highest court has found illegal. Subject to section 3902(a)(4) on discrimination, States keep the power to set how people prove financial responsibility for a license or permit. States can accept or reject coverage from admitted insurers, excess lines, risk retention groups, or any other source, however it was bought.

Full Legal Text

Title 15, §3905

Commerce and Trade — Source: USLM XML via OLRC

(a)Nothing in this chapter shall be construed to exempt a risk retention group or purchasing group authorized under this chapter from the policy form or coverage requirements of any State motor vehicle no-fault or motor vehicle financial responsibility insurance law.

(b)The exemptions provided under this chapter shall apply only to the provision of liability insurance by a risk retention group or the purchase of liability insurance by a purchasing group, and nothing in this chapter shall be construed to permit the provision or purchase of any other line of insurance by any such group.

(c)The terms of any insurance policy provided by a risk retention group or purchased by a purchasing group shall not provide or be construed to provide insurance policy coverage prohibited generally by State statute or declared unlawful by the highest court of the State whose law applies to such policy.

(d)Subject to the provisions of section 3902(a)(4) of this title relating to discrimination, nothing in this chapter shall be construed to preempt the authority of a State to specify acceptable means of demonstrating financial responsibility where the State has required a demonstration of financial responsibility as a condition for obtaining a license or permit to undertake specified activities. Such means may include or exclude insurance coverage obtained from an admitted insurance company, an excess lines company, a risk retention group, or any other source regardless of whether coverage is obtained directly from an insurance company or through a broker, agent, purchasing group, or any other person.

Reference

Citations & Metadata

Citation

15 U.S.C. § 3905

Title 15 — Commerce and Trade

Last Updated

Apr 3, 2026

Release point: 119-73not60