The Risk Retention Act of 1986 is a law enacted by the federal government which enabled parties to form risk retention groups (RRG) and purchasing groups (RPG) for certain types of liability exposures. This law came in response to a large number of pleas from the business community and municipalities across the country.
According to the Risk Retention Act of 1986, the members of a proposed risk purchasing group or risk retention group must be involved in similar or related business activities in order to lawfully form an RPG or an RRG. This is a very important feature of this law because it clearly lays out which parties can form these types of associations. So, for example, several different municipalities may form an RPG or RRG, but it might be unlawful for a municipality to form one by partnering with a hedge fund.
Share this Term
Stay informed with Insuranceopedia!
The world of insurance can be complicated. Subscribe to the Insuranceopedia newsletter and stay in the know! Access expert content, industry term definitions and answers to your questions from knowledgeable insurance insiders. Arm yourself with what you need to know to keep your assets and your family safe.
Latest Articles
