Two rival organizations representing risk retention groups were split today over where and on what their industry should focus its lobbying efforts.

The divergence surfaced after the American Risk Retention Coalition (ARRC) called yesterday for expansion of the federal Liability Risk Retention Act and the leader of a separate risk retention association said he was baffled at their timing.

ARRC, formed earlier this year to serve as an advocate for risk retention groups, called for a revisit of expansion of the federal Liability Risk Retention Act (LRRA) to additional lines of insurance such as property insurance and excess workers' compensation insurance.

“We see no reason why this valuable form of insurance should be limited to liability coverage,” ARRC Chairman Dick Goff said in the statement. “In fact, we will recommend to Congress that 'liability' be dropped from the name of the law, to become simply the Risk Retention Act.”

But Brian Donovan, chairman of the National Risk Retention Association, which formerly championed a push to expand the federal act, noted that ARRC's position is “kind of old news.” He continued, “We were dealing with this issue a year-and-a-half ago and it appeared that it hit a dead end.”

He said NRRA dropped the effort because of other pressing issues, which took precedence.

“That was a fight that was probably lower on our list of priorities,” he said. “It's my opinion that you don't take a shotgun approach to change; you try to focus on the things that are most significant to our industry.”

NRRA's current focus, he said, is on the impact of the General Accountability Office (GAO) report on RRGs as well as “what NAIC is doing, and the focus of the GAO report within congressional committees and subcommittees. That's really where the time and effort needs to be spent.”

When the report was released last September, the GAO recommended that the NAIC draft new rules for RRGs.

Mr. Donovan said NRRA's general concern has been that if ARRC takes on issues “that have different priorities and a different focus than NRRA, all the RRG-related issues will be watered down.”

He added, “If the issue of expanding the LRRA were to be revisited after the other issues are resolved, we'd certainly support the expansion. But [currently] it's out of sync with our priorities.”

ARRC said it will press for expansion of insurance lines “when Congress reviews possible improvements in the LRRA, which is expected to occur this spring.”

ARRC said it would like to see the LRRA expanded to allow RRGs to insure other risks. Currently they are limited to a variety of liability risks including medical malpractice, transportation and home building.

Mr. Goff said Congress's authorization of RRGs to provide liability insurance to their members applies “equally to their ability to offer certain other lines as well. Paramount of these is the restricted availability of traditional commercial insurance that has occurred in the aftermath of Hurricane Katrina and other natural disasters of 2005.”

He said that in many states it has been “difficult or impossible to obtain new coverage for property risks, as well as excess insurance for workers' compensation programs.”

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Retention Trade Groups Split On Lobby Paths

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