WASHINGTON--A federal lawmaker said he is drafting a measure tolet risk retention groups offer property coverage and to improvecorporate governance of such operations.

Rep. Dennis Moore, D-Kan., disclosed his plans to introduce thebill in comments today at the annual meeting of the Self-InsuranceInstitute of America Inc.

"I believe the time is now, before we experience another hardmarket for commercial property insurance, to expand the LiabilityRisk Retention Act to include property coverage," Rep. Mooresaid.

The 1986 federal law creating risk retention groups currentlylimits them to providing liability insurance. They are structuredas corporations or limited liability associations that function ascaptive insurance companies for member owners that are licensed asinsurance companies or chartered as captives.

Mr. Moore said passage of his legislation will "add much neededcapacity to the commercial insurance marketplace by improvingcompetition, which will undoubtedly lead to more affordable andavailable coverage."

Rep. Moore said at the meeting that the bill will includeprovisions upgrading corporate governance issues cited by theGovernment Accountability Office as a concern in a report thatotherwise said the law had been effective in adding capacity atreasonable cost in certain lines of liability insurance.

Specifically, the legislation will address ways of reducingconflicts of interest in captive insurance entities and increasingthe financial contributions from member-insureds, he said.

Factors contributing to many RRG failures suggest that sometimesmanagement companies have promoted their own interests at theexpense of the insureds," the GAO report said.

Mr. Moore said the bill would also address accounting standards,another issue cited by the GAO in its 2005 report. The report wasrequested by Rep. Mike Oxley, R-Ohio, then chairman of the FSC.

James McIntyre, counsel for the Coalition to Expand RiskRetention Groups, a group based in Washington which represents alltrade groups involved with risk retention groups, said it hopes theGAO study can be addressed in the legislation by including aprovision that ensures the directors of the RRG are "in control" ofthe management of the entity.

Mr. McIntyre said he hopes the sponsors of the bill and thecoalition "can come together" on language that can be included in asingle bill before it is introduced in the House. "The key isensuring that there are safeguards that provide strong oversight ofmanagement by the directors," he explained.

Mr. Moore said he planned to introduce his legislation nextmonth, "and I will encourage the Financial Services Committee toconduct a hearing on this important issue."

An SIIA official said the bill is expected to have strongbipartisan support from representatives of coastal areas. TheRepublican co-sponsor will be Rep. Deborah Pryce of Ohio, a memberof the House Republican leadership and, like Rep. Moore, a memberof the House Financial Services Committee.

Rep. Moore said "the ability to operate across state lines--andeven nationally--with a single primary regulator has been animportant reason for the growth of risk retention groups."