South Carolina Leads In 2004 RRG Formations

Following publication of last months column (Dec. 13, page 30),a state insurance department regulator e-mailed, asking if theRisk Retention Reporter had any numbers about the statesof domicile for any of the 54 risk retention groups that formedlast year”specifically, which states are the most attractive forRRG formation?”

Of the 54 risk retention groups formed in 2004, South Carolinawas the domicile of choice for more than a dozen RRGs. Vermont camein second, and the District of Columbia third. Fourteen RRGs (26percent) were domiciled in South Carolina during 2004, while 11 (20percent) were domiciled in Vermont, and nine (16 percent) inD.C.

Arizona accounted for eight RRG formations, Nevada for seven,and Hawaii for two. Other states in which RRGs became domiciledlast year were Georgia, Kentucky and Montana.

The domicile with the most diversity in RRGs was D.C., with RRGsformed in six business areas. Vermont came in second with five, andSouth Carolina was next with four. Diversity in business areas canbe significant, as domiciles tend to attract RRGs in particularbusiness areas.

The accompanying table shows the number of RRGs formed in 2004by domicile as well as the business area.

Karen Cutts is editor and publisher of the Risk RetentionReporter in Pasadena, Calif. Visit www.rrr.com for information onrisk retention groups and purchasing groups.

Reproduced from National Underwriter Edition, January 20, 2005.Copyright 2005 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.