What is a Risk Retention Group?

What is a Risk Retention Group?

Risk retention groups (RRGs) are policyholder owned insurance companies created under the Federal Liability Risk Retention Act.  An RRG is an entity whose primary activity consists of assuming and spreading the liability of its members or owners who are engaged in similar or related businesses. An RRG is licensed in its domicile state and subject to the applicable state insurance regulations.  Once licensed in any one state, an RRG may operate in any state, subject to approved registration.  From a regulatory perspective, RRGs generally have increased flexibility compared to traditional commercial insurance companies.