§ 5909. Restrictions on insurance obtained by purchasing groups. (a) A
purchasing group located in this state shall not purchase liability
insurance from a risk retention group not chartered in a state or from
an insurer not authorized in this state, unless the purchase is effected
pursuant to section two thousand one hundred eighteen of this chapter
through an excess line broker licensed pursuant to section two thousand
one hundred five of this chapter, except where otherwise permitted
pursuant to section two thousand one hundred seventeen of this chapter.

(b) The terms of any liability insurance policy issued or issued for
delivery in this state to a purchasing group or any of its members shall
not provide, or be construed to provide, insurance coverage prohibited
generally by state statute or declared unlawful by the highest court of
the state whose law applies to such policy. If the law of this state
applies to an insurance policy obtained by a purchasing group, the terms
of that policy shall not provide or be construed to provide insurance
coverage prohibited generally by state statute or declared unlawful by
the highest court of this state which has construed such coverage.

(c) A purchasing group which obtains liability insurance from an
insurer not authorized in this state or a risk retention group shall
inform each of the members of such group which have a risk resident or
located in this state that such risk is not protected by an insurance
insolvency security fund in this state, and that such risk retention
group or such insurer may not be subject to all insurance laws and
regulations of this state.

(d) No liability insurance policy issued or issued for delivery in
this state to a purchasing group or a member of such group with a risk
resident or located within this state shall provide for a deductible or
self-insured retention shared among purchasing group members or
applicable to the group itself.