Our Position | Risk Retention Act

The Liability Risk Retention Act, enacted in the 1980s in response to a liability insurance crisis, effectively preempted state insurance laws and provided for the creation of risk retention groups, or RRGs, to provide coverage in all U.S. jurisdictions. The LRRA currently permits RRGs to underwrite commercial lines liability coverage, excluding workers’ compensation, and does not apply to personal lines coverage. Under the Act, risk retention groups that meet certain licensing requirements of one state may operate nationwide. Except for the RRG’s chartering state, the risk retention group is exempt from any state law, rule, or regulation that regulates or makes an RRG unlawful (with certain exceptions, including compliance with fraudulent trade practices regulations, nondiscrimination, and unfair claim settlement practices, and participation in state guaranty funds).

Several attempts have been made to further expand RRG coverage to include group insurance. Time and time again, NAMIC has argued that current market conditions do not warrant a national and permanent expansion of RRGs into property or other non-liability insurance. The admitted market is fully capable of providing this coverage. Expansion at this time is unnecessary to address any crisis in availability and affordability that would override the fundamental principles of regulatory fairness. NAMIC believes the entire insurance industry would be better served by focusing on competitive market reforms for all types of carriers across all lines, not by targeting a select group for preferential regulatory treatment.

NAMIC Position

NAMIC opposes legislation that would expand the LRRA by allowing RRGs and purchasing groups to cover property risks. Permitting these groups to write additional lines of commercial insurance, while generally exempt from state law requirements and standards, would likely lead to an unfair competitive environment and raise concerns for covered entities.

NAMIC Provides Testimony at House Hearing on HR 4523

February 3, 2020 The House Financial Services Committee Subcommittee on Housing, Community Development and Insurance held a hearing Jan. 29 titled “Examining the Availability of Insurance for Nonprofits.” Jon Bergner, NAMIC’s assistant vice president of public policy... Read more

Skepticism of RRG Expansion Voiced at House Hearing

October 2, 2017 The House Financial Services Subcommittee on Housing and Insurance held the hearing “Examining Insurance of the Nonprofit Organizations” on Sept. 22 on expanding the role of risk retention groups... Read more

House Panel to Examine Draft Bill on RRG Expansion

September 23, 2017 The House Financial Services Subcommittee on Housing and Insurance will hold a hearing Sept. 28 on the draft legislation expanding the role of risk retention groups, also known as RRGs. NAMIC has long opposed the expansion of the... Read more

NAMIC Launches Industry Coalition to Oppose Efforts to Expand Risk Retention Act

July 31, 2017 After being alerted by a member of the House Financial Services Committee about efforts to expand the Liability Risk Retention Act, NAMIC has re-launched an industry-wide coalition and began meeting with key... Read more

NAMIC Opposes RRG Bill That Creates Unlevel Regulatory Playing Field

October 22, 2015 WASHINGTON, D.C., Oct. 22 – The National Association of Mutual Insurance Companies voiced strong opposition to legislation introduced Oct. 21 that would needlessly expand the ability of risk retention groups to offer coverage already available but witho... Read more


Jon Bergner
Vice President - Public Policy and Federal Affairs