WASHINGTON—Several federal legislators are asking the Government
Accountability Office to study regulation of risk retention groups by
states in which the groups operate but are not licensed.
The
lawmakers want the GAO to examine whether so-called nondomiciliary
states are attempting to regulate RRGs directly or indirectly through,
among other things, filing requirements, fees and waiting periods before
the groups can operate, according to Reps. Dennis Moore, D-Kan.;
Suzanne Kosmas, D-Fla.; and John Campbell, R-Calif.
In addition,
the three representatives asked in a letter sent to the GAO Thursday for
the office to examine whether there are legislative solutions to
“underscore the foundation” of the Liability Risk Retention Act, which
narrow limits the ability of nondomiciliary states to interfere with
RRGs.
RRG and self-insurance trade associations, which have long
asserted that states have improperly interfered with RRGs that are
licensed outside their borders, welcomed the study.
“The
imposition of filing fees, filing requirements, information requests,
waiting periods and other duties not authorized by the LRRA are a
continuing problem for the RRG industry,” Robert Myers, general counsel
for the National Risk Retention Assn. and a partner with Morris, Manning
and Martin L.L.P. in Washington, said in a statement.
“The GAO
study will be a great step toward quantifying the problem and hopefully
providing the basis for needed congressional oversight,” Mr. Myers
added.The Self Insurance Institute of America “applauded” the
legislators' request for a GAO study to investigate state “abuses” of
RRGs.
There currently are about 250 RRGs, which were authorized
under measures Congress passed in 1981 and 1986, according to the Risk
Retention Reporter, a Pasadena, Calif.-based newsletter that tracks the
industry.
Risk retention groups, which are specialized
multiple-owner captive insurance companies, can directly write all
commercial casualty coverage—except workers compensation—for
policyholder owners.
Copyright © 2010 Crain Communications, Inc.