How does the Risk Retention Act work?
The Risk Retention Act allows businesses who face similar exposures to own or belong to RRGs for the primary purpose of obtaining commercial liability insurance coverage.

What is a Risk Retention Group?
A Risk Retention Group is an insurance company owned by its members. The RRG issues policies to its members and it bears risk. Members are typically required to capitalize the RRG.

Who can be a member of a Risk Retention Group?
Any company meeting the underwriting, premium and subscription guidelines established by the Group. The authorizing federal act requires the group's members to share similar business, trade, product, services, premises or operations. National Contractors Insurance Company, Inc. a RRG's RRG is available to those in artisan construction trades. Click here for a list of available classes.

What kinds of insurance coverage do Risk Retention Groups provide?
Each RRG is organized for the primary purpose of supplying liability insurance.

How many Risk Retention Groups are there?
More than 230 as of August, 2006 (Source Risk Retention Reporter)

How much premium do Risk Retention Groups generate?
More than $2 billion (Source Risk Retention Reporter)

Who forms Risk Retention Groups?
They must be owned directly or indirectly by businesses who share similar traits and who face similar exposures.

Who regulates Risk Retention Groups?
The federal government authorized the creation of RRGs. This legislation specifically prohibits state laws or regulations that would inhibit the ability of RRGs to operate in more than one state.The RRG must be domiciled in one state but may do business in others. The state of domicile may create its own application and approval process. The authorizing legislation also prohibits states other than that of domicile to regulate the formation and operation of RRGs. There are some important exceptions to these prohibitions, notably the ability for states to regulate RRGs domiciled elsewhere in the areas of unfair claims settlement practices, corrective actions in the event of financial impairment, and deceptive acts or practices.

What are the advantages and disadvantages of a Risk Retention Group?
RRGs are similar to group self-insurance programs. Because member companies share the same kinds of business risks, RRGs are uniquely positioned to understand the associated risks and to help member companies control those risks. Member companies who do not follow the risk management recommendations of the RRGs may be asked to take their business elsewhere. This shared understanding of business practices and risk often affords the ability to price premiums with great accuracy and to operate with great efficiency.

RRGs are prohibited by law from participating in state insurance solvency guaranty funds. This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.