S.1789 - Product Liability Risk Retention Act of 197996th Congress (1979-1980)
|Sponsor:||Sen. Culver, John C. [D-IA] (Introduced 09/21/1979)|
|Committees:||Senate - Commerce, Science, and Transportation|
|Latest Action:||Senate - 09/21/1979 Referred to Senate Committee on Commerce, Science, and Transportation. (All Actions)|
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Summary: S.1789 — 96th Congress (1979-1980)All Information (Except Text)
Introduced in Senate (09/21/1979)
Product Liability Risk Retention Act of 1979 - Title I: Risk Retention Groups - Directs the Secretary of Commerce to promulgate standards for the approval of risk retention groups. Defines such groups as entities formed to assume or spread the liability of two or more persons arising from products liability claims or defective construction claims. Enumerates standards which the Secretary may consider in approving any such group including the amount and liquidity of its assets, soundness of its reserves, adequacy of its insurance coverage, and its overall plan of operations.
Sets forth factors to be included in a group's application for approval. Authorizes the Secretary to conduct audits of the applicant.
Sets forth limitations on the risk coverage afforded to any one person in the group. Authorizes the Secretary to make approval conditional as necessary. Requires any refusal of approval to specify the factual conclusions and legal authority upon which is is based.
Authorizes the Secretary to require a group to set a maximum amount of risk which it will accept. Requires such a group's participants to obtain insurance for losses in excess of such maximum limitations. Establishes requirements for the terms of such insurance coverage.
Prohibits a group from assuming liability for any person other than its members or its members' affiliates. Permits a group to assume liability which arises from an agreement of hold harmless or indemnity between a member and its supplier, purchaser, or consignee. Requires all or a portion of an individual's product liability or completed operations risk exposure be assumed by the group. Sets forth requirements concerning the return of a withdrawing member's capital contribution. Prohibits such groups from acquiring reinsurance from its members or affiliates. Prohibits a group from making non-pro-rata assessments or retroactive adjustments based on the loss experience of a member.
Directs the Secretary to require each group to maintain reserves which it shall hold as a fiduciary for the benefit of claimants against its members. Prohibits a group from having any interest in the securities or debts or its members or their affiliates.
Requires each group to submit annual reports to the Secretary.
Declares that this Act shall preempt any State law relating to the formation, operation, or provision of insurance-services to risk retention groups. Stipulates that this Act shall not effect the authority of a State to tax risk retention groups. Applies Federal antitrust laws to such groups. Exempts the ownership interest of such groups from the securities laws.
Limits the use of information obtained pursuant to this Act. Permits the Secretary to require data concerning the product liability claims experience of such groups.
Authorizes the Secretary to audit each group and to require each group to engage an independent accountant to examine its books, records, and financial statements.
Requires each group to pay an application fee and annual fees to cover supervisory expenses of the Secretary.
Authorizes the Secretary to revoke the certificate of approval of a risk retention group. Enumerates circumstances in which such authority may be exercised.
Requires that all hearings to revoke a group's certificate of approval be held in the District of Columbia. Exempts such hearings from requirements of law relating to agency adjudications.
Empowers the United States District Court for the District of Columbia to hear appeals from orders of the Secretary issued pursuant to this Act.
Requires the proceeds from a group's reinsurance policies to be paid to the group's receiver or other appropriate judicial officer if the group is adjudged insolvent.
Title II: Group Purchase of Product Liability and Completed Operations Insurance - Exempts any group seeking to purchase liability insurance, its members, or any person who provides such insurance from any State law which restricts group insurance or would prohibit or discriminate against the application of this Act.
Title III: Miscellaneous Provisions - Declares that this Act shall not be deemed to affect State tort law.
Directs the Secretary to issue rules and regulations and to take all other actions necessary or appropriate to implement this Act.