Risk Retention Groups

Updated: 09 June 2023

What Does Risk Retention Groups Mean?

Risk retention groups (RRG) are a particular type of insurance company formed by the Federal Liability Risk Retention Act, which allows a member to write all types of liability insurance, except workers' compensation, property insurance, and policies for personal lines.

Insuranceopedia Explains Risk Retention Groups

Risk retention groups are different from a traditional insurance company because they are exempted from getting a state license as well as state laws that regulate insurance in the state where they operate. Furthermore, an RRG is a mutual insurance company, wherein members are the owners. It covers liability risks of commercial companies and government entities, but all of the policies it creates need to indicate that it is not regulated with the same state laws applied to regular policies. There is elimination of excess state filing and licensing requirements, and the members have the control over risk and litigation issues. However, risks are only limited to liability insurance, and members have no guaranty fund in the event that the company is damaged.

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