A coalition launched to serve as a representative of risk retention groups has one advocate for the industry wondering if a proliferation of such organizations will dilute the sector's lobbying effectiveness at a critical time.

He, and others in the industry, who declined to be identified, voiced additional concerns that added dues from this latest group could financially burden the captive and RRG members who already belong to several organizations.

The new entry, the American Risk Retention Coalition, was begun by the Self-Insurance Institute of America. Its formation was announced yesterday by James A. Kinder, SIIA chief executive officer.

ARRC, the announcement said, will serve as the advocate of risk retention groups "that represent an economical and efficient way for professions or trade groups to manage a variety of risk exposures."

Mr. Kinder told National Underwriter that the mission of the coalition is "to ensure the future of risk retention groups and to expand upon programs available to be underwritten by RRGs on a federal preemptive basis."

He said the group's plans include educating members of Congress about the importance of the Liability Risk Retention Act and the success of RRGs during the 20-plus years the act has been in effect.

ARRC steering committee chairman Richard C. Goff said in a statement that the status of RRGs is threatened by erosion of their federal protection.

Concerns about alteration of the Federal Risk Retention Act were heightened last year by the release of the Government Accountability Office RRG Report in September 2005.

Many of those recommendations were favorable to RRGs, but some states have used aspects of the GAO report as a platform to rein in RRGs, Mr. Goff said.

In reaction, Brian Donovan, chairman of the board of the National Risk Retention Association, released a statement yesterday that said: "We are the long established voice of the risk retention and purchasing group industry, and we are happy to cooperate with any group that advances the interests of our industry in a responsible and knowledgeable manner."

Mr. Kinder said the coalition is necessary because uniform regulatory processes need to be addressed as well as ways RRGS can be used to accommodate shortcomings in the insurance market. He emphasized that ARRC will work in tandem with other domicile and captive associations.

But Jon Harkavy, vice president and general counsel with Risk Services, LLC in Arlington, Va., questioned whether formation of another group is the answer.

"From a captive manager's point of view, and perhaps from a risk retention group's point of view, there's already association overload," he said.

"We just put to bed a group called CARFM [the Coalition of Alternative Risk Funding Mechanisms] because we could not get the other associations to contribute--it seemed that Vermont [the Vermont Captive Insurance Association] was always the focus," said Mr. Harkavy, a former CARFM president and a VCIA board member.

In 2002 CARFM listed its member organizations in a release: Colorado Association of Captive Entities (CACE); Georgia Captive Association (GCA); Hawaii Captive Insurance Council (HCIC); Illinois Captive & Alternative Risk Funding Insurance Association (ICARFIA); NRRA; Risk and Insurance Management Society (RIMS); and VCIA.

Mr. Harkavy added that a potential drawback for owners of RRGs is that ARRC "is definitely not cheap--it's much more expensive than CARFM would have been."

He explained that a captive owner already is being "asked to join its state of domicile's association, NRRA and CICA [Captive Insurance Companies Association]--and now they're asked to join this." Dues for joining all of these associations could cost a captive or RRG owner $4,000-$5,000 annually, he speculated.

"What we need," he concluded, "is more workers, not another association to tell us what we should be doing."

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