An appeal by the National Risk Retention Association and numerous risk retention groups that the state of Massachusetts drop its redundant requirements of RRGs--which are governed by a federal law--has been heeded, but the requests were only partially met, said the group's counsel.

Robert H. "Skip" Myers Jr., general counsel for NRRA, said the state's requirements included:

o An application or renewal form.

o A National Association of Insurance Commissioners biographical affidavit for every officer and director.

o A check for $125.

o A completed NAIC Uniform Certificate of Authority Application questionnaire (Form 8).

He described the UCAA Form 8 as a "monstrous form, which is basically the heart of the traditional licensing application."

Because RRGs fall under the federal Liability Risk Retention Act, he said, they are required to license in their state of domicile and merely provide notice, in the form specified by the act, to other states in which they will be operating.

Another requirement by Massachusetts raising objections was the biographical affidavit. "A lot of people don't like the idea of a biographical affidavit that includes your Social Security number being filed with different states," Mr. Myers said. "Who knows what's going to happen under the Freedom of Information Act, or what security arrangements are in place?"

NRRA's original letter, dated July 13, said that each of the four requirements violates the LRRA's limitation on a nondomiciliary state's authority.

The letter said many RRG filers "have become accustomed to completing an annual form and submitting a modest filing fee to nondomiciliary state regulators. Those actions are performed as an accommodation to the states and should not be construed as an agreement or waiver that such actions are permitted by the LRRA."

The letter continued that the law is "crystal clear that these requests by Massachusetts violate the LRRA and are subject to federal preemption."

In response, he said, Massachusetts issued a notice on July 30, from the office of Nonnie S. Burnes, Massachusetts commissioner of insurance, stating it had dropped the UCAA Form 8, "which is great," he said.

He noted, however, that the state is still asking for the check for $125, the biographical information and the application form, which he said was expanded to include even more questions.

The letter from Massachusetts stated the information was needed "to assist the Division in adequately protecting the citizens of this Commonwealth. Particularly, the Division seeks to identify pending or resolved administrative or legal proceedings(s) involving these risk retention groups, or their officers and directors, to the extent this information has not been identified through the Division's prior registration and renewal process."

Mr. Myers said NRRA plans to respond with another letter addressing the association's concerns with some of the questions, and the obligation to file the biographical affidavits.

Special Reports /

Mass. Makes Concessions To RRGs, But Objections Remain

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