What is a Risk Retention Group? (Apply to USA only)
- Risk Retention Groups (RRGs) are liability insurance companies that are owned by their members.
- RRGs are authorized by the Federal Liability Risk Retention Act of 1986.
- Under this Act the RRG can be domiciled in one state but can engage in business in all states.
- Risk Retention Group members engage in similar or related activities and have similar risk
- Liability insurance, which is written in a RRG, does not include workers compensation and personal lines of insurance.
Risk Retention Group Benefits (Apply to USA only)
- Ability to write insurance in numerous States without being licensed in each State and having to comply with the different laws of each State.
- Ability for members to control their risk and the management of their risk.
- Positively affect insurance premium rates and coverage.
- Allows members to have stability of coverage.
- Potential of reducing costs compared to the costs of using a fronting insurance carrier.
How to Set up a Risk Retention Group
- Select professional service providers
- Reserve preferred company name
- Complete pre-incorporation documents
- Develop Business Plan
- Apply to regulatory authority
- Applications approved and Risk Retention Group licensed in state of domicile
- Apply to NAIC once application has been approved
- Register in other states
- Risk Retention Group commences operation
