Legislation expanding the Liability Risk Retention Act to include property insurance exposures as a means of providing more affordable catastrophe coverage in coastal states will be introduced within the next month in the House of Representatives.
Rep. Dennis Moore, D-Kan., disclosed his plans to introduce the bill in comments at the annual meeting of the Self-Insurance Institute of America here last week.
An SIIA official said the bill is expected to have strong bipartisan support from representatives of disaster-prone areas.
The Republican co-sponsor will be Rep. Deborah Pryce, R-Ohio, a member of the House Republican leadership who is, like Rep. Moore, a member of the House Financial Services Committee.
Rep. Moore noted at the meeting that his bill will include provisions upgrading corporate governance--an issue cited by the Government Accountability Office as a concern in a report that otherwise said the RRG law had been effective in adding capacity at reasonable cost in certain lines of liability insurance.
Specifically, the legislation will address ways of reducing conflicts of interest in captive insurance entities and increasing the financial contributions from member-insureds, he said.
It will also address accounting standards, another issue cited by the GAO in its 2005 report--which had been requested by Mike Oxley, the Ohio Republican who chaired the Financial Services Committee at the time.
"I plan to introduce legislation that would accomplish these goals in the next month, and I will encourage the Financial Services Committee to conduct a hearing on this important issue," he said.
"I believe the time is now, before we experience another hard market for commercial property insurance, to expand the Liability Risk Retention Act to include property coverage," Rep. Moore said.
He explained that passage of his legislation will "add much needed capacity to the commercial insurance marketplace by improving competition, which will undoubtedly lead to more affordable and available coverage."
The governance provision is being examined closely by the alternative risk-transfer community, according to one RRG industry official attending the meeting here.
"We are hoping this issue can be addressed in another way," the official said, noting that RRG representatives plan to work with Rep. Moore and the Financial Services Committee on another approach.
James McIntyre, counsel for the Washington-based Coalition to Expand Risk Retention Groups, said his collection of RRG supporters hopes the so-called "skin in the game" issue raised in the GAO study can be addressed in Rep. Moore's legislation by including a provision that ensures RRG directors are "in control" of the entity's management.
Mr. McIntyre said he also hopes the bill's sponsors and the coalition "can come together" on language that can be included in a single bill before it is introduced in the House. "The key is ensuring that there are safeguards that provide strong oversight of management by the directors," he explained.
In his comments, Rep. Moore said "the ability to operate across state lines--and even nationally--with a single primary regulator has been an important reason for the growth of risk retention groups."
Rep. Moore is no stranger to insurance issues, having co-authored H.R. 1065--the Nonadmitted and Reinsurance Reform Act of 2007. The bill passed the House unanimously on June 25, 2007 and is now awaiting action in the Senate.
Joel Wood, senior vice president of government affairs at the Council of Insurance Agents and Brokers, which supports RRG expansion, called Rep. Moore "a leader in the House on insurance regulatory issues," adding that "it is difficult to envision how any modernization legislation can ultimately be enacted without Dennis Moore's active engagement."
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.