Registering a Purchasing Group in California
The Notice and Registration and Appointment of Attorney to Accept Service and Designation are the forms a purchasing group needs to complete in order to register in California. This registration is required both by the Federal Liability Risk Retention Act (15 U.S.C. Section 3901, et seq.) and the California Risk Retention Act (California Insurance Code Section 125, et seq.) before the purchasing group commences business in California. Along with the forms, the purchasing group must submit a filing fee payable to the California Department of Insurance for the registration fee required by Insurance Code Section 134(b). Please see Schedule of Fees and Charges. The purchasing group should submit these items to:
Pretrice Curry-Bossett, Senior Legal Analyst
California Department of Insurance
Legal Division, Corporate Affairs Bureau
45 Fremont Street, 24th Floor
San Francisco, CA 94105
Item 13 of the notice and registration form requests a copy of the purchasing group's notice to its members in connection with insurers not admitted to do business in California. Please note that this obligation of the purchasing group is separate and distinct from the disclosure obligations of the surplus line broker as provided in the surplus line laws.
Any person transacting the business of insurance in this State must have an appropriate license, whether the business is connected with a purchasing group or otherwise. Further, placement of California risks with a non-admitted insurer must be made by a licensed surplus line broker in accordance with the surplus line laws. (California Insurance Code Section 1761, et seq. and related regulations.)
Information on obtaining a license is available from the Department's:
Licensing Services Division
320 Capitol Mall, 1st Floor
Sacramento, CA 95814
(916) 492-3064 or (800) 967-9331
A nonresident surplus line license is available for a broker transacting business solely with a purchasing group.
When a purchasing group purchases insurance from an admitted insurer or a registered risk retention group, the premium tax is paid by the insurer or risk retention group to the California Department of Insurance. In the case of insurance purchased from a non-admitted insurer, the surplus line broker is required to pay the tax to the Surplus Line Association. Further information on payment of taxes can be obtained from the Department's:
Premium Tax Audit Bureau
300 South Spring Street, 14th Floor
Los Angeles, CA 90013
An admitted insurer providing coverage to a purchasing group must have prior approval of its rates in the same fashion as for insurance provided on an individual basis. Non-admitted insurers are not subject to prior approval of rates. Further information on rate filing requirements can be obtained from the Department's:
Rate Filing Bureau
45 Fremont Street, 23rd Floor
San Francisco, CA 94105
Once the Department has reviewed the purchasing group's submission, the Department will either provide the group with written notice of its registration or with a request for additional information. If additional information is needed, the purchasing group will be required to respond within 30 days. Failure to respond within 30 days will result in abandonment of the filing. Abandonment will be without prejudice to the filing of a new notice and registration, but the filing fee is not refundable.
The purchasing group should be aware that, effective January 1, 1996, California Insurance Code Section 134(e) requires annual re-registration of a purchasing group, which includes the submission of a renewal fee of $200.00, in order to keep its registration current. Each purchasing group must file its re-registration materials on or before January 31 of each year. In addition, Section 130(b)(1) and (2) requires that a purchasing group be registered in its domiciliary state to do business under the Federal Liability Risk Retention Act (15 U.S.C. Section 3901 and following).
Annual Registration Renewal
California Insurance Code section 134(e) requires annual re-registration of a purchasing group in order to keep its registration current. Each purchasing group must file its renewal materials on or before January 31 of each year. In addition, California Insurance Code section 130(b)(1) and (2) requires that a purchasing group be registered in its domiciliary state to do business under the Federal Liability Risk Retention Act. 15 U.S.C. § 3901 et seq.
The purchasing group must file the California Annual Re-Registration Statement and pay the annual renewal fee of $200.00 on or before January 31 of each year in order to maintain its active status in California.
Please be advised that purchasing groups may file their renewal statements electronically through our Online Assistance System for Insurer Submittals (OASIS) or mail the original form with filing fee made payable to the California Department of Insurance at our San Francisco Office, 45 Fremont Street, 24th Floor, San Francisco, CA 94105. For technical assistance regarding OASIS, please contact Oasis@insurance.ca.gov.
If the department does not hear from the purchasing group by January 31, the California Department of Insurance will assume that the purchasing group no longer wishes to maintain active status in California and therefore, the group may no longer operate, solicit or otherwise transact its business in California. Should the group wish to become active in California at a later date, it will need to submit the required original Notice and Registration Statement, all supporting documentation, and pay the initial registration fee in effect at that time.
Should you have any questions, please contact Pretrice Curry-Bossett.