Definitions of acronyms and terms used in this questionnaire
Risk Retention Group (RRG):
An RRG is any corporation or other limited liability association whose primary activity consists of
assuming and spreading all, or any portion of the liability exposure to its group members and who has
as its owners, only persons who comprise the membership of the RRG and who are provided insurance by such group.
The Liability Risk Retention Act permits RRGs to provide commercial liability insurance for its members and
largely exempts them from state insurance laws other than the laws of their domiciliary and licensing state.
State of Domicile:
The state that charters and licenses an RRG and is responsible for performing regulatory oversight, including
examinations. ("State" includes the District of Columbia, and for RRGs licensed before 1985, Bermuda and the Cayman Islands.)
Any state in which an RRG is registered and insures risks but is not licensed and chartered.
In Section II, we are asking about the role of your state as a "host state" regulator.
The 1986 Liability Risk Retention Act limits the state laws that may be enforced by the "host state" regulators
to RRGs insuring risks in but not domiciled or licensed in their states. This section pertains only to
requirements for RRGs operating and insuring risks, but not domiciled in your state.
A. Submission of Operational Plans or Feasibility Studies and Financial Statements to Host State Regulators
The Liability Risk Retention Act requires that each RRG submit to the insurance commissioner of
each state in which it intends to do business, a copy of a plan of operation or a feasibility
study which includes the coverages, deductibles, coverage limits, rates and rating classification systems
for each line of insurance the group intends to offer, and a copy of any revisions to such plan or study.
The Act also requires that each RRG submit to the insurance commissioner of each state in which it is doing business,
a copy of the group's annual financial statement submitted to the State in which the group is licensed as an
insurance company, which statement shall be certified by an independent public accountant and contain a statement
of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries,
or a qualified loss reserve specialist.
INSTRUCTIONS: To answer questions 13 and 14, please refer to the following table, which lists all RRGs
that reported writing premiums in your state to NAIC during 2010. To respond to the questions below,
please compare the list of RRGs that reported to NAIC that they wrote premiums in your state in 2010
with your internal records.
For Part III, we are asking about fees, taxes and other registration requirements
that RRGs must satisfy to insure risks in your state. To answer question 19 please refer to the corresponding
table, which lists your state's premium tax rates by type of insurer as obtained from NAIC. Please note:
The "insurer generally" tax rate was used if your state does not make a distinction between the premium
tax rates charged for the types of insurers listed in the table below. If your state has a specific premium tax rate for
RRGs, this rate was used for both domiciled and non-domiciled RRGs if no distinction was made.
For Part IV, we are asking about your state's regulatory experiences involving
RRGs as a domiciliary or host state insurance regulator. To answer questions 22 - 24, please refer
to the specific RRG involved with a number (i.e. RRG 1, RRG 2). Please do not provide the specific name of the RRG.
Questions 24 and 25 ask you to identify actions and proceedings involving your state and an RRG.
Question 24 specifically asks about administrative actions and Question 25 specifically asks about
civil or criminal proceedings.
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