For years, industry professionals had discussed whether riskretention groups could provide contractual liability for stop-losscoverage for employers that self-fund employee group medicalplans.

The discussion seemed to have reached a favorable conclusionwhen, in 2005, Vermont licensed the first RRG to provide suchcoverage and Montana, in April 2007, licensed the second.

It is the second RRG--Ad-Comp Med RRG Inc.--that has now runinto a snag, with California denying its application forregistration. The RRG provides contractual liability for Californiaauto dealer franchises who qualify under ERISA self-funded employeegroup medical plans.

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