Who manages a Risk Retention Group (RRG)?

A Risk Retention Group (RRG) is a type of insurance company that is formed to provide liability coverage for its members who share similar risks. The key aspect of RRGs is that they are owned and controlled by the insureds themselves, meaning that the members of the group actively participate in the management and decision-making processes of the RRG. This structure allows insureds to tailor insurance solutions to their unique risks and needs.

In contrast, external investors, local governments, and insurance regulators do not manage RRGs. External investors may have a financial interest in an insurance company but do not typically have a role in managing RRGs. Local governments can sometimes form or participate in RRGs, but they do not manage the groups as a whole. Insurance regulators oversee the operations of RRGs to ensure compliance with applicable laws and regulations, but they do not manage the group itself. The self-management by insureds is what distinguishes RRGs from traditional insurance arrangements, allowing for greater influence over the operations of the insurance provided.