The new chairman of an organization lobbying the government to allow federally-regulated risk retention groups to expand their coverage areas said he expects to see the effort gain ground this year.

"Momentum has been building. Optimistically, I'd like to say we'll get the attention of Congress, and I think we'll see if this year we can't make some good inroads," commented Larry L. Smith, who heads the American Risk Retention Coalition (ARRC).

The group was formed to facilitate expansion of the federal Liability Risk Retention Act (LRRA) to include property insurance and other coverages.

Mr. Smith noted that ARRC's urgency to expand the LRRA was heightened by the withdrawals of major insurers from property markets including coastal areas in several states following the recent hurricanes. "This is one of those priorities crying out to be addressed," he told National Underwriter.

While not a panacea, self-insurance through risk retention groups, he added, has provided an alternative and has allowed "new vehicles and risk management techniques to be developed."

Mr. Smith, president of MedStar Liability Limited Insurance Company, a risk retention group based in Columbia, Md., told National Underwriter that with the new Congress, "all of us are interested in what's going to happen with the various committees that might have responsibility for insurance regulation."

Mr. Smith noted that his organization would like to see the LRRA more strongly solidified "so it doesn't erode in the future, and also see it broadened."

The LRRA, he said, has been beneficial "in a number of fields, particularly in my field, which is medical malpractice insurance and liability."

MedStar Liability Limited is comprised of the seven hospitals in the Baltimore-Washington, D.C. region that are owned by MedStar Health.

In a statement for the coalition, he said ARRC "will work to answer the need for property insurance for RRGs that was expressed in the recent poll by the Risk Retention Reporter."

If Congress authorizes RRGs to provide property insurance, 40 percent of responding RRG leaders in that reader survey said they would provide the coverage to their members.

Mr. Smith said the group is "enthusiastic and excited" about the prospects for movement on the issue this year in Congress.

Mr. Smith, the organization's second chairman, said the assumption is that ARRC will have a "rotating chair," but that "since it's only our second year, time will tell."

He added that he accepted the position on the basis that it would be a one-year appointment, "but I'll certainly be happy to take a look at it again next year, or I'll be happy to turn it over to someone else, as long as work continues."

Mr. Smith succeeds outgoing chairman Dick Goff of The Taft Companies, an RRG management firm operating in many captive domiciles. Mr. Goff has served as founding chairman of ARRC since it was launched early last year.

ARRC said it is a coalition of risk retention groups, trade associations and other interested parties who join in its advocacy to expand federal authorization of RRGs to offer property insurance, excess workers' compensation and other coverages to their member-owners.

Information about ARRC is available at www.arrcoalition.org.

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