---
kind: "section"
citation: "15 U.S.C. § 8206"
title: "15"
title_heading: "Commerce and Trade"
number: "8206"
heading: "Definitions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/8206"
units:
  - "Chapter 108 — State-Based Insurance Reform"
  - "Subchapter I — Nonadmitted Insurance"
---

# §8206. Definitions


For purposes of this subchapter, the following definitions shall apply:

- (1) **Admitted insurer—** The term “admitted insurer” means, with respect to a [State](#16), an insurer licensed to engage in the business of insurance in such [State](#16).
- (2) **Affiliate—** The term “affiliate” means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured.
- (3) **Affiliated group—** The term “affiliated group” means any group of entities that are all affiliated.
- (4) **Control—** An entity has “control” over another entity if—
  - (A) the entity directly or indirectly or acting through 1 or more other [persons](/usc/15/7a.md?p=6) owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the other entity; or
  - (B) the entity controls in any manner the election of a majority of the directors or trustees of the other entity.
- (5) **Exempt commercial purchaser—** The term “exempt commercial purchaser” means any [person](/usc/15/7a.md?p=6) purchasing commercial insurance that, at the time of placement, meets the following requirements:
  - (A) The [person](/usc/15/7a.md?p=6) employs or retains a [qualified risk manager](#13) to negotiate insurance coverage.
  - (B) The [person](/usc/15/7a.md?p=6) has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months.
  - (C)
    - (i) The [person](/usc/15/7a.md?p=6) meets at least 1 of the following criteria:
      - (I) The [person](/usc/15/7a.md?p=6) possesses a net worth in excess of $20,000,000, as such amount is adjusted pursuant to [clause (ii)](#5-C-ii).
      - (II) The [person](/usc/15/7a.md?p=6) generates annual revenues in excess of $50,000,000, as such amount is adjusted pursuant to [clause (ii)](#5-C-ii).
      - (III) The [person](/usc/15/7a.md?p=6) employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an [affiliated group](#3) employing more than 1,000 employees in the aggregate.
      - (IV) The [person](/usc/15/7a.md?p=6) is a not-for-profit organization or public entity generating annual budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to [clause (ii)](#5-C-ii).
      - (V) The [person](/usc/15/7a.md?p=6) is a municipality with a population in excess of 50,000 [persons](/usc/15/7a.md?p=6).
    - (ii) Effective on the fifth January 1 occurring after July 21, 2010, and each fifth January 1 occurring thereafter, the amounts in subclauses [(I)](#5-C-i-I), [(II)](#5-C-i-II), and [(IV)](#5-C-i-IV) of clause (i) shall be adjusted to reflect the percentage change for such 5-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.
- (6) **Home State—**
  - (A) **In general—** Except as provided in [subparagraph (B)](#6-B), the term “home State” means, with respect to an insured—
    - (i) the [State](#16) in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or
    - (ii) if 100 percent of the insured risk is located out of the [State](#16) referred to in [clause (i)](#6-A-i), the [State](#16) to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
  - (B) **Affiliated groups—** If more than 1 insured from an [affiliated group](#3) are named insureds on a single [nonadmitted insurance](#9) contract, the term “[home State](#6-A)” means the [home State](#6-A), as determined pursuant to [subparagraph (A)](#6-A), of the member of the [affiliated group](#3) that has the largest percentage of premium attributed to it under such insurance contract.
- (7) **Independently procured insurance—** The term “independently procured insurance” means insurance procured directly by an insured from a [nonadmitted insurer](#11).
- (8) **NAIC—** The term “NAIC” means the National Association of Insurance Commissioners or any successor entity.
- (9) **Nonadmitted insurance—** The term “nonadmitted insurance” means any property and casualty insurance permitted to be placed directly or through a [surplus lines broker](#15) with a [nonadmitted insurer](#11) eligible to accept such insurance.
- (10) **Non-Admitted Insurance Model Act—** The term “Non-Admitted Insurance Model Act” means the provisions of the Non-Admitted Insurance Model Act, as adopted by the [NAIC](#8) on August 3, 1994, and amended on September 30, 1996, December 6, 1997, October 2, 1999, and June 8, 2002.
- (11) **Nonadmitted insurer—** The term “nonadmitted insurer”—
  - (A) means, with respect to a [State](#16), an insurer not licensed to engage in the business of insurance in such [State](#16); but
  - (B) does not include a risk retention group, as that term is defined in [section 3901(a)(4) of this title](/usc/15/3901.md?p=a-4).
- (12) **Premium tax—** The term “premium tax” means, with respect to surplus lines or [independently procured insurance](#7) coverage, any tax, fee, assessment, or other charge imposed by a government entity directly or indirectly based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.
- (13) **Qualified risk manager—** The term “qualified risk manager” means, with respect to a policyholder of commercial insurance, a [person](/usc/15/7a.md?p=6) who meets all of the following requirements:
  - (A) The [person](/usc/15/7a.md?p=6) is an employee of, or third-party consultant retained by, the commercial policyholder.
  - (B) The [person](/usc/15/7a.md?p=6) provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance.
  - (C) The [person](/usc/15/7a.md?p=6)—
    - (i)
      - (I) has a bachelor’s degree or higher from an accredited college or university in risk management, business [administration](/usc/15/636e.md?p=1), finance, economics, or any other field determined by a [State](#16) insurance commissioner or other [State](#16) regulatory official or entity to demonstrate minimum competence in risk management; and
      - (II)
        - (aa) has 3 years of experience in risk financing, claims [administration](/usc/15/636e.md?p=1), loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or
        - (bb) has—
          - (AA) a designation as a Chartered Property and Casualty Underwriter (in this subparagraph referred to as “CPCU”) issued by the American Institute for CPCU/Insurance Institute of America;
          - (BB) a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;
          - (CC) a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;
          - (DD) a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or
          - (EE) any other designation, certification, or license determined by a [State](#16) insurance commissioner or other [State](#16) insurance regulatory official or entity to demonstrate minimum competency in risk management;
    - (ii)
      - (I) has at least 7 years of experience in risk financing, claims [administration](/usc/15/636e.md?p=1), loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and
      - (II) has any 1 of the designations specified in subitems (AA) through (EE) of [clause (i)(II)(bb)](#13-C-i-II-bb);
    - (iii) has at least 10 years of experience in risk financing, claims [administration](/usc/15/636e.md?p=1), loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or
    - (iv) has a graduate degree from an accredited college or university in risk management, business [administration](/usc/15/636e.md?p=1), finance, economics, or any other field determined by a [State](#16) insurance commissioner or other [State](#16) regulatory official or entity to demonstrate minimum competence in risk management.
- (14) **Reinsurance—** The term “reinsurance” means the assumption by an insurer of all or part of a risk undertaken originally by another insurer.
- (15) **Surplus lines broker—** The term “surplus lines broker” means an individual, firm, or corporation which is licensed in a [State](#16) to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in a [State](#16) with [nonadmitted insurers](#11).
- (16) **State—** The term “State” includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.

## Source credit

(Pub. L. 111–203, title V, § 527, July 21, 2010, 124 Stat. 1591.)

## Notes

### Statutory Notes and Related Subsidiaries

### Definitions

For definitions of terms used in this section, see section 5301 of Title 12, Banks and Banking.