Risk Retention Expansion Hits Snag
An attempt to have expansion of the Federal Liability Risk Retention Act linked to the Senate terrorism insurance bill failed last week, but alternative market officials vowed to continue the fight to give insurance buyers more options.
"We're going to regroup and see if maybe they'll reconsider in conference," said Bernard Fulton, who represents the Housing Authority Risk Retention Group, which is a member of the Coalition for the Expansion of the Risk Retention Act (CERRA).
If the provision does not emerge as part of the compromise bill to be crafted by a House-Senate Conference Committee, however, "we'll have to either go as standalone legislation or look for some other vehicle. There's not a lot of time left, but we haven't precluded anything."
Mr. Fulton, legislative consultant with Reno & Cavanaugh, PLLC in Washington, said the proposed LRRA expansion "hadn't seen any real opposition on the merits of the substance of the provision." However, "as you can imagine, not only was there was a lot of pressure to get terrorism insurance done, but there was also a lot of pressure to move on to other things. So we just ran out of time."
Daniel Labrie, treasurer of the Captive Insurance Companies Association and chief executive officer of the Housing Authority Risk Retention Group, based in Cheshire, Conn., was disappointed but said CERRA plans to meet to discuss the next step.
Expansion of the Federal Liability Risk Retention Act would permit risk retention groups and purchasing groups, currently limited to offering only liability insurance, to provide all forms of commercial insurance except workers' compensation and personal lines, according to CICA.
CICA's board just last week endorsed the proposed expansion to the Risk Retention Act and is joining the coalition, said CICA President Carl Modecki, principal of Carl A. Modecki Consulting Services in Tallahassee, Fla. CICA's board voted to make a financial contribution of $2,500 to the coalition, he said.
The coalition's membership includes the Consumer Federation of America; the Vermont Captive Insurance Association and Vermont Insurance Department; the Colorado Association of Captive Entities; the Risk and Insurance Management Society; and the Council of Insurance Agents and Brokers, along with real estate representatives.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, June 24, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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