---
kind: "section"
citation: "15 U.S.C. § 3903"
title: "15"
title_heading: "Commerce and Trade"
number: "3903"
heading: "Purchasing groups"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/3903"
units:
  - "Chapter 65 — Liability Risk Retention"
---

# §3903. Purchasing groups

- (a) **Exemptions from State laws, rules, regulations, or orders—** Except as provided in this section and [section 3905 of this title](/usc/15/3905.md), a [purchasing group](/usc/15/3901.md?p=a-5) is exempt from any [State](/usc/15/3901.md?p=a-6) law, rule, regulation, or order to the extent that such law, rule, regulation, or order would—
  - (1) prohibit the establishment of a [purchasing group](/usc/15/3901.md?p=a-5);
  - (2) make it unlawful for an insurer to provide or offer to provide [insurance](/usc/15/3901.md?p=a-1) on a basis providing, to a [purchasing group](/usc/15/3901.md?p=a-5) or its members, advantages, based on their loss and expense experience, not afforded to other [persons](/usc/15/7a.md?p=6) with respect to rates, policy forms, coverages, or other matters;
  - (3) prohibit a [purchasing group](/usc/15/3901.md?p=a-5) or its members from purchasing [insurance](/usc/15/3901.md?p=a-1) on the group basis described in paragraph (2) of this subsection;
  - (4) prohibit a [purchasing group](/usc/15/3901.md?p=a-5) from obtaining [insurance](/usc/15/3901.md?p=a-1) on a group basis because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time;
  - (5) require that a [purchasing group](/usc/15/3901.md?p=a-5) must have a minimum number of members, common ownership or affiliation, or a certain legal form;
  - (6) require that a certain percentage of a [purchasing group](/usc/15/3901.md?p=a-5) must obtain [insurance](/usc/15/3901.md?p=a-1) on a group basis;
  - (7) require that any [insurance](/usc/15/3901.md?p=a-1) policy issued to a [purchasing group](/usc/15/3901.md?p=a-5) or any members of the group be countersigned by an [insurance](/usc/15/3901.md?p=a-1) agent or broker residing in that [State](/usc/15/3901.md?p=a-6); or
  - (8) otherwise discriminate against a [purchasing group](/usc/15/3901.md?p=a-5) or any of its members.
- (b) **Scope of exemptions—** The exemptions specified in [subsection (a)](#a) apply to—
  - (1) liability [insurance](/usc/15/3901.md?p=a-1) provided to—
    - (A) a [purchasing group](/usc/15/3901.md?p=a-5); or
    - (B) any [person](/usc/15/7a.md?p=6) who is a member of a [purchasing group](/usc/15/3901.md?p=a-5); and
  - (2) the provision of—
    - (A) liability coverage;
    - (B) [insurance](/usc/15/3901.md?p=a-1) related services; or
    - (C) management services;

    to a [purchasing group](/usc/15/3901.md?p=a-5) or member of the group.

- (c) **Licensing of agents or brokers for purchasing groups—** A [State](/usc/15/3901.md?p=a-6) may require that a [person](/usc/15/7a.md?p=6) acting, or offering to act, as an agent or broker for a [purchasing group](/usc/15/3901.md?p=a-5) obtain a license from that [State](/usc/15/3901.md?p=a-6), except that a [State](/usc/15/3901.md?p=a-6) may not impose any qualification or requirement which discriminates against a nonresident agent or broker.
- (d) **Notice to State insurance commissioners of intent to do business—**
  - (1) A [purchasing group](/usc/15/3901.md?p=a-5) which intends to do business in any [State](/usc/15/3901.md?p=a-6) shall furnish notice of such intention to the [insurance](/usc/15/3901.md?p=a-1) commissioner of such [State](/usc/15/3901.md?p=a-6). Such notice—
    - (A) shall identify the [State](/usc/15/3901.md?p=a-6) in which such group is domiciled;
    - (B) shall specify the lines and classifications of liability [insurance](/usc/15/3901.md?p=a-1) which the [purchasing group](/usc/15/3901.md?p=a-5) intends to purchase;
    - (C) shall identify the [insurance](/usc/15/3901.md?p=a-1) company from which the group intends to purchase [insurance](/usc/15/3901.md?p=a-1) and the domicile of such company; and
    - (D) shall identify the principal place of business of the group.
  - (2) Such [purchasing group](/usc/15/3901.md?p=a-5) shall notify the commissioner of any such [State](/usc/15/3901.md?p=a-6) as to any subsequent changes in any of the items provided in such notice.
- (e) **Designation of agent for service of documents and process—** A [purchasing group](/usc/15/3901.md?p=a-5) shall register with and designate the [State](/usc/15/3901.md?p=a-6) [insurance](/usc/15/3901.md?p=a-1) commissioner of each [State](/usc/15/3901.md?p=a-6) in which it does business as its agent solely for the purpose of receiving service of legal documents or process, except that such requirement shall not apply in the case of a [purchasing group](/usc/15/3901.md?p=a-5)—
  - (1) which—
    - (A) was domiciled before April 1, 1986; and
    - (B) is domiciled on and after October 27, 1986;[^1]

    in any [State](/usc/15/3901.md?p=a-6) of the United States;

  - (2) which—
    - (A) before September 25, 1981, purchased [insurance](/usc/15/3901.md?p=a-1) from an [insurance](/usc/15/3901.md?p=a-1) carrier licensed in any [State](/usc/15/3901.md?p=a-6); and
    - (B) since September 25, 1981, purchases its [insurance](/usc/15/3901.md?p=a-1) from an [insurance](/usc/15/3901.md?p=a-1) carrier licensed in any [State](/usc/15/3901.md?p=a-6);
  - (3) which was a [purchasing group](/usc/15/3901.md?p=a-5) under the requirements of this chapter before October 27, 1986; and
  - (4) as long as such group does not purchase [insurance](/usc/15/3901.md?p=a-1) that was not authorized for purposes of an exemption under this chapter as in effect before October 27, 1986.
- (f) **Purchases of insurance through licensed agents or brokers acting pursuant to surplus lines laws—** A [purchasing group](/usc/15/3901.md?p=a-5) may not purchase [insurance](/usc/15/3901.md?p=a-1) from a [risk retention group](/usc/15/3901.md?p=a-4) that is not chartered in a [State](/usc/15/3901.md?p=a-6) or from an insurer not admitted in the [State](/usc/15/3901.md?p=a-6) in which the [purchasing group](/usc/15/3901.md?p=a-5) is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such [State](/usc/15/3901.md?p=a-6).
- (g) **State powers to enforce State laws—** Nothing in this chapter shall be construed to affect the authority of any [State](/usc/15/3901.md?p=a-6) to make use of any of its powers to enforce the laws of such [State](/usc/15/3901.md?p=a-6) with respect to which a [purchasing group](/usc/15/3901.md?p=a-5) is not exempt under this chapter.
- (h) **States’ authority to sue—** Nothing in this chapter shall affect the authority of any [State](/usc/15/3901.md?p=a-6) to bring an action in any Federal or [State](/usc/15/3901.md?p=a-6) court.

## Footnotes

[^1]: See Codification note below.

## Source credit

(Pub. L. 97–45, § 4, Sept. 25, 1981, 95 Stat. 951; Pub. L. 99–563, §§ 6, 8(b), 12(d), Oct. 27, 1986, 100 Stat. 3174, 3175, 3178.)

## Notes

### Editorial Notes

### Codification

October 27, 1986, referred to in subsec. (e)(1)(B), was in the original “the date of the enactment of this Act” which was translated as meaning the date of the enactment of Pub. L. 99–563, which enacted subsec. (e), to reflect the probable intent of Congress.

### Amendments

1986—Subsec. (a). Pub. L. 99–563, § 8(b)(1), inserted reference to section 3905 of this title.

Subsec. (b)(1). Pub. L. 99–563, § 12(d)(1), substituted “liability insurance” for “product liability or completed operations liability insurance, and comprehensive general liability insurance which includes either of these coverages,”.

Subsec. (b)(2)(A). Pub. L. 99–563, § 12(d)(2), struck out “product liability or completed operations insurance, and comprehensive general” before “liability coverage”.

Subsecs. (d) to (h). Pub. L. 99–563, §§ 6, 8(b)(2), added subsecs. (d) to (h).