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THE

RISK RETENTION ACT

 

 

DISADVANTAGES:

    Risks limited to liability insurance;

    Not permitted to write outside business;

    No guaranty fund availability for members; and

    May not be able to comply with proof of financial responsibility laws.

 

Over the past 40 years, with few exceptions, Congress has left regulation of the insurance industry to the states, each of which have their own requirements, including licensing laws, “seasoning” requirements, fictitious group laws, restrictions on the ability of insurers to offer to a group special terms regarding rates and coverage, higher tax rates on foreign (out of state) insurers, and countersignature laws.  To help promote the formation and multi-state operation of group liability insurance programs, Congress enacted the Products Liability Risk Retention Act in 1981 and expanded its scope through amendments in 1986.  With the advent of the 1986 Risk Retention Act, counter-signature and fictitious group laws, which had previously restricted formation of group purchase of liability coverage, were eliminated.  Moreover, Congress prohibited discrimination against risk retention states.  It was the Congressional intent to enable businesses, professionals, non-profit organizations and governmental agencies to establish self-insurance pools (RRGs).

 

 

 

 

 

 

F. Darrell Lindsey

State Approved Captive/RRG Manager

U.S. State Licensed Agent/Broker

 

 

 

 

 

 

 

CLICK TO:      RRG - Essentials

RRG – An Analysis

RRG – A Summary

RRG – Q&A – The Rest of the Story

Risk Retention Act – The Law

 

 

 

 

 

 

 

 

 

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