Sec. 6. Risk pools; risk retention groups.

275 words·~1 min read·/il/chapter-215/act-150/6

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A trust fund may enter into written agreements with other trust funds established under this Act whereby the risks assumed by any such trust fund may be pooled and shared with such other trust funds.

(b)A trust fund may enter into written agreements for the purpose of assuming risks from

(i)risk pools or risk retention groups established or organized pursuant to the laws of any other state exclusively to provide protections, as described in this Act, to organizations which are exempt from taxation under paragraph

(3)of subsection

(c)of Section 501 of the Internal Revenue Code, as amended from time to time, and their affiliated title holding corporations that are exempt from taxation under paragraph

(2)of subsection

(c)of Section 501 of the Internal Revenue Code of 1954, as amended from time to time, or

(ii)insurance companies with regard to protections, as described in this Act, exclusively for organizations which are exempt from taxation, as aforesaid. As a condition to such authority, any trust fund so assuming risk from any risk pool, risk retention group or insurance company, shall, directly or through an underwriting manager controlled by it, underwrite risks assumed by it either on a facultative basis or on a primary basis pursuant to an underwriting management agreement with the entity from which risk is being assumed. Such underwriting management agreement shall provide for underwriting risks assumed on behalf of both the ceding entity and the assuming trust fund. For purposes of this subsection (b), the term "underwrite" shall include, but not be limited to, classification, selection and pricing of risks.