Risk Retention Groups
Like dental practices, Risk Retention Groups (RRGs) are for Main Street and not Wall Street. The RRG structure allows the company to act differently than most publicly traded stock companies, which typically must split their focus between customers and shareholders. A RRG is a member-owned insurance company and is created under the federal Liability Risk Retention Act. Members (policyholders) must be engaged in similar businesses and a large percentage of RRGs are healthcare related. A RRG is subject to the state insurance laws where it is domiciled and then registers in the other states in which it does business.
Being a RRG means we exist for the benefit of our members and provides the opportunity to share in the company’s favorable results.
RRG Benefits Include:
- Owned by its members
- Self-governance, dependability and reliability
- Taking a long-term view and doing what is right for members
- Profits can be distributed as dividends and/or kept in the RRG to grow capital base
- Control over how claims are handled
- Control over how premiums are set
- Offer long-term rate stability
- Efficient operations overhead costs
- Flexibility to customize coverage as needed
Vermont is the largest Risk Retention Group domicile in the United States and has been a leader in the captive insurance industry for over thirty years. In 1981, the Vermont Legislature passed the Special Insurer Act which was designed to provide a unique and attractive statutory framework for captive formation. These landmark regulations have become the model of captive regulation. Vermont’s captive insurance statute has been modified continually to meet the needs of this dynamic, fast-paced industry.
The Vermont legislature listens and is responsive; and Vermont has a team of regulatory professionals dedicated to serving captives. The Captive Insurance Division of the Vermont Department of Financial Regulation (DFR) is dedicated to attracting and serving the captive insurance industry and has the largest governmental staff of captive insurance professionals in the world. Throughout its history in Vermont, the captive insurance industry has received universal and enthusiastic support from the governors and state legislators.