§8206 Definitions

Summary

Provides plain meanings for key words used in this part of the law. The list below gives each term and a very short description. Admitted insurer: an insurer licensed to do insurance business in a State. Affiliate: an entity that controls, is controlled by, or is under common control with the insured. Affiliated group: a group made up of affiliates. Control: owning or voting 25% or more of a class of voting securities, or controlling election of a majority of directors or trustees. Exempt commercial purchaser: a buyer of commercial insurance who uses a qualified risk manager, paid over $100,000 in nationwide commercial property and casualty premiums in the prior 12 months, and meets at least one size test (net worth over $20,000,000; annual revenue over $50,000,000; more than 500 employees or an affiliated group with over 1,000; not‑for‑profit or public with budgeted expenditures at least $30,000,000; or a municipality with population over 50,000). The $20,000,000, $50,000,000, and $30,000,000 amounts are adjusted every fifth January 1 after July 21, 2010, based on the 5‑year change in the CPI‑U. Home State: where the insured’s main business or residence is, or if the risk is 100% outside that State then the State with the largest share of taxable premium; for multiple named insureds in an affiliated group on one policy, the home State is the member with the largest share of premium. Independently procured insurance: insurance bought directly by an insured from a nonadmitted insurer. NAIC: the National Association of Insurance Commissioners (or its successor). Nonadmitted insurance: property and casualty insurance that may be placed with a nonadmitted insurer directly or through a surplus lines broker. Non‑Admitted Insurance Model Act: the NAIC model as adopted August 3, 1994, and amended September 30, 1996; December 6, 1997; October 2, 1999; and June 8, 2002. Nonadmitted insurer: an insurer not licensed in a State, but does not include a risk retention group as defined in section 3901(a)(4) of this title. Premium tax: any government tax, fee, assessment, or charge based on payments for surplus lines or independently procured insurance, including deposits, assessments, registration fees, or other payment for the insurance contract. Qualified risk manager: an employee or hired consultant who works on loss prevention, risk or insurance analysis, and buying insurance, and who meets education, experience, or certification tests (options include a bachelor’s degree plus 3 years’ related experience or certain professional designations; 7 years’ experience plus a designation; 10 years’ experience; or a graduate degree). Reinsurance: when one insurer takes all or part of a risk from another insurer. Surplus lines broker: a person or firm licensed in a State to sell, solicit, or negotiate insurance with nonadmitted insurers for risks in that State. State: any U.S. State, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, or American Samoa.