This section states rules for a group doing business in Texas as a purchasing group or risk retention group, defining the requirement of similar or related liability exposure, pursuant to the Insurance Code, Article 21.54, §2(9) and (10). If a group violates any of the provisions in this section, the group does not meet the requirement. Any group or organization that fails to meet the requirement shall not have the status of a risk retention group or a purchasing group under the Insurance Code, Article 21.54. (1) A group's membership shall not be based on various theories of potential legal liability. By way of example only, a professional liability exposure is not similar or related to a product liability exposure. (2) A group's members must reasonably be able to engage in a joint loss prevention program. (3) If a group's membership consists of businesses, all those businesses must be tied to the
same kind of product or service. By way of example only, if a group's membership includes manufacturers and repairers, they all must manufacture or repair the same kind of product. (4) If a group's membership consists of professionals who provide a service, all the members must provide the same kind of service.
|
