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- Title
Risk Retention Groups in Medical Malpractice Insurance: A Test of the National Chartering Option.
- Authors
Born, Patricia; Boyer, M. Martin; Barth, Michael M.
- Abstract
The liability crisis of the eighties led to the enactment of the federal Liability Risk Retention Act of 1986, which encouraged the formation of risk retention groups (RRGs), a new organizational form that is exempt from many aspects of state insurance regulation. When an RRG is licensed in a domiciliary state, it is then free to do business in other states without the requirement to become licensed in that state. This streamlined regulatory environment for RRGs creates a quasinational license. Some of the regulatory issues that have arisen with respect to the RRG organizational form may provide insights into potential market enhancements-as well as potential regulatory problems-that may arise from a federal insurance charter, should that come to pass. This aspect is important, as we argue that the main advantage of being an RRG over a state-incorporated stock company must come from the regulatory side rather than the financial and/or economic side of the business.
- Publication
Journal of Insurance Regulation, 2009, Vol 27, Issue 4, p3
- ISSN
0736-248X
- Publication type
Academic Journal