Filing an Application for a Risk Retention Group
The Liability Risk Retention Act requires that every Risk Retention Group shall submit as follows:
To the Insurance Commissioner in the State in which the Risk Retention Group wishes to become chartered
Before it may offer insurance in any state, a plan of operation or a feasibility study will need to be provided. This should include the coverages, deductibles, coverage limits, rates and rating classification systems for each line of insurance the group intends to offer.
Revisions of such a plan or study will need to be submitted if the group intends to offer any additional lines of liability insurance at a later date.
To the Insurance Commissioner of each State in which the Risk Retention Group intends to do business
A copy of such plan or study (which shall include the name of the state in which it is chartered and its principal place of business) and;
A copy of any revisions to such plan or study which shall include any change in the designation of the state in which it is chartered.
Monitoring a Risk Retention Group
In order to maintain the confidence and to ensure that the Risk Retention Group is profitable, all underwriting issues will need to be documented in order that forecasts can be made with regard to anticipated claims.
As expertise is developed, coverage issues can be reviewed. Monitoring the types of claims arising will be important to the evaluation of whether coverages need to be restricted or can be broadened. As loss expertise is developed, recommendations made to members as to how loss prevention techniques can be implemented to help reduce losses.
The Liability Risk Retention Act requires that every Risk Retention Act shall submit a copy of the group's annual financial statement submitted to the state in which the group is chartered to the Insurance Commissioner of each state in which it is doing business,
This statement should be certified by an independent public accountant and contain a statement on loss and loss adjustment expense reserves, made by either a member of the American Academy of Actuaries, or a qualified loss reserve specialist.
Also in this section
The Federal Liability Risk Retention Act of 1986
Preparing a Feasibility Study for a Risk Retention Group
Appointing Service Providers for a Risk Retention Group
The Advantages and Disadvantages of Risk Retention Groups