NAIC RRG Flashcards

1
Q

Define an RRG

A

Risk Retention Group
* a liability insurance company owned by its members
* members are a group of similar businesses that have pooled their risks
* medical malpractice is the most common LOB

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2
Q

Formation of an RRG

A

Formed using a combination of state & federal laws under the auspices of the Federal LRRA (Liability Risk Retention Act):
* must submit a plan of operation to commissioner of domiciliary state that includes coverage, deductibles, limits, rates, classification system

May be formed under a state’s captive or traditional insurance laws

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3
Q

Operation of an RRG

A
  • may write business directly in states where they are registered without obtaining a license (captives can’t do this)
  • can be domiciled in 1 state but still do business in another state if a registration process is completed and the state’s commissioner is designated as agent for service of process
  • treated as multi-state insurers and subject to NAIC accreditation standards for RRGs
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4
Q

RRG financial filing requirements

A
  • Financial statements (yellow book format)
  • RBC
  • SAO
  • MD&A (Management’s Discussion and Analysis)
  • Audited statements
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5
Q

Regulatory differences between RRGs and traditional insurers

A
  • many RRGs use GAAP instead of SAP
  • few RRGs submit rate filings
  • RRGs can’t participate in state guaranty funds
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