This time last year, I wrote about the much discussed and then rejected plan to merge two important alternative market groups–the Captive Insurance Companies Association and the National Risk Retention Association.
I reasoned that united they would be better able to serve all alternative risk-transfer market constituents. One group rather than two, I thought, would have meant one less meeting for captive owners and ancillary businesses to attend, and less money paid out in annual dues to multiple organizations. Most importantly, it would have meant a stronger lobbying organization and a bigger voice representing the alternative market.
Why this didn't happen is still a mystery. Some believe CICA's networking mission and NRRA's ongoing lobbying efforts–first to expand the Liability Risk Retention Act, and now to see that risk retention groups are heard in light of the Government Accountability Office report challenging RRGs–were just too far apart.
After seeing benefits in a possible CICA-NRRA merger, I can't help but wonder about the wisdom of creating yet another association in the alternative market world. With new organizations being launched on a regular basis by emerging domiciles, do we really need another ART group?
On paper, the new American Risk Retention Coalition may sound like a good idea, especially at a time when some feel RRGs are on the defensive. But as this coalition is being formed, another group, CARFM (the Coalition of Alternative Risk Funding Mechanisms)–which was started for the very same reason–is being disbanded due to lack of support.
In fact, Jon Harkavy, former CARFM president, asserts there is already "association overload." His coalition didn't make it because "we could not get the other associations to contribute," he warned.
In 2002, CARFM was going strong, boasting a number of member organizations, including the Colorado Association of Captive Entities, Georgia Captive Association, Hawaii Captive Insurance Council, Illinois Captive and Alternative Risk Funding Insurance Association, NRRA, the Risk and Insurance Management Society, and the Vermont Captive Insurance Association. However, their interest dwindled–and so did the dollars needed to run the coalition.
Other than ARRC's organizers, who assert their coalition is "an economical and efficient way for professions or trade groups to manage a variety of risk exposures," I had a hard time finding anyone who felt that a new group was needed.
"We've had NRRA all these years lobbying, and I don't know why we need another association. This has been tried before, and there's no need for it," asserted Leonard Crouse, deputy commissioner of the Captive Insurance Division with the Vermont Department of Banking, Insurance, Securities and Health Care Administration.
NRRA Chairman Brian Donovan told National Underwriter his group was asked to serve on ARRC's steering committee, but noted that his board voted unanimously to decline the invitation at a recent meeting.
This brings me to my final point–cost. A letter obtained by NU states that an association wishing to join forces with the coalition would be required to pay a relatively hefty $5,000. What's more, information about the cost of individual memberships, as stated on an application, is deemed "confidential" until an applicant is accepted as a member.
Combined annual dues for membership in several organizations for a captive or RRG owner may already amount to $4,000-to-$5,000 annually, Mr. Harkavy speculated. Whether multiple memberships are worth the price remains to be seen, but one thing is clear–membership in CARFM would have been a lot cheaper, and that idea never took off.
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