NRRA: Time Is Ripe For Our Lobby Effort

By Caroline McDonald

NU Online News Service, March 6, 11:39 a.m. EST, Tucson,Ariz.? The attorney for the National Risk RetentionAssociation said the group believes the current market climate canhelp them win a change in federal law allowing them to writeproperty insurance.

The group met here yesterday to map plans for an amendment ofthe Liability Risk Retention Act of 1986, which limits them toliability insurance coverage, and to seek an expansion of thecoverages offered by risk retention and purchasing groups.

Philip Olsson, general counsel to the Minneapolis-basedassociation, interviewed here during NRRA's joint annual conferencewith the Captive Insurance Companies Association, said that theNRRA has for some time been looking to expand the coverages thatrisk retention groups could write.

The effort underway now, he said, "intersects with the currenthard market, where there is a need for property coverage, inparticular."

Association members, he said, have "a practical problem of onlywriting liability coverage and competing with full-line insurancecompanies that can offer a variety of coverages."

Mr. Olsson said that a group of NRRA members met to draftlegislation that might expand this authority, "and it ended up witha fairly simple answer that will leave in place currentrestrictions against writing personal lines or against writingstatutory workers' compensation coverage."

The draft leaves all other commercial coverages open to riskretention group writings, he said.

"We think this is appropriate in the current hard market, and wethink risk retention groups have done well with liability coverage.It's time to move into these other coverages," he added.

Douglas Barnes, executive director for NRRA, said conferenceregistrations spiked noticeably three weeks ago, after theassociation sent letters to 375 risk retention groups andpurchasing groups announcing plans to seek amendments to theLRRA.

The letter noted that the Government Affairs Committee of NRRA"is compiling a draft of proposed amendments to the Liability RiskRetention Act, including the expansion of the LRRA to includeproperty coverage." The letter also announced that a discussion ofthe amendment had been added to the conference program.

NRRA has 101 members, Mr. Barnes noted. He said there are about75 risk retention groups in the United States and 700 purchasinggroups. Because the LRRA is a federal act, risk retention andpurchasing groups are permitted to do business in every state, hesaid.