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In 1996, the NRRA Public Affairs Fund provided
funding in support of litigation filed in the
United States Court of Appeals for the Fifth Circuit
in Louisiana, which action was led by NRRA and
joined by three other NRRA members. NRRA and the
other plaintiffs prevailed in establishing the
pre-emptive rights of the federal Liability Risk
Retention Act for RRGs using that state’s
application and licensing procedures.
In 1997, NRRA supported long-time member National
Warranty Insurance Company RRG through the filing
of an amicus curiae brief in an action brought
in federal District Court in Oregon. While National
Warranty prevailed in this action, the State of
Oregon recently filed a Petition to the Supreme
Court for a Writ of Certiorari. NRRA is considering
its options for further filings at this time.
The Public Affairs Fund has offset NRRA’s
legal costs in filing and defending amicus curiae
briefs on behalf of other NRRA members in a variety
of earlier court cases filed throughout the United
States.
Click
here to view cases.
2006 Public Affairs Fund Donors
- Global International Insurance Company, Inc. RRG
- Gulf States Financial Services
- Housing Authority Insurance RRG, Inc.
- The National Catholic RRG, Inc.
- National Home Insurance Company, a RRG
- PCH Mutual Insurance Company, RRG
- Pinetree Insurance, a Reciprocal RRG
- STICO Mutual Insurance Company, a RRG
- States Self-Insurers RRG, Inc.
Thank you for your support!
Proposed
Claims Procedures for the Terrorism Risk Insurance
Act of 2002 (Posted
12/04/03)
Submitted
by NRRA General Counsel, Robert "Skip"
Myers, Morris Manning & Martin, LLP
The Department of the Treasury recently published
a proposed rule establishing procedures for submitting
claims for federal reimbursement under the Terrorism
Risk Insurance Act of 2002 (TRIA). Comments on
the proposed TRIA claims procedures must be submitted
to Treasury by December 31, 2003.
For details Click
Here
U.S.
Department of the Treasury issues a final rule implementing
aspects of TRIA
(Posted
7/14/03)
Submitted by NRRA Government Affairs Committee
Chair, Robert "Skip" Myers, Morris Manning
& Martin, LLP
Click
here for a summary and analysis of the final rule.
This week, the U.S. Department of the Treasury issued
a final rule implementing aspects of the Terrorism
Risk Insurance Act of 2002. Morris, Manning &
Martin's summary and analysis of the final rule
is now available by clicking here.
Among other things, the final rule reiterates
Treasury's position that state licensed and
admitted captive insurers must participate in
the Terrorism Risk Insurance Program; establishes
a formal procedure for requesting interpretations
of the Act; substantially modifies the rebuttable
presumptions established for determining affiliate
status among insurers, which is important to
calculating the deductible for federal reimbursement;
and establishes new criteria for determining
whether joint underwriting associations, pooling
arrangements and other similar arrangements
are subject to the Act.
LRRA Amendment
Updates
Check back often for updates. When ever we
have progress or activity to report it will be
posted here.
December 2003
NRRA Members Only: For a more
report on the NAIC's Working Group meeting on
December 7, 2003, Click
Here.
NRRA Government Affairs Committee Update
The Government Affairs Committee met by
telephone conference on December 16, 2003, to
receive a report from Skip Myers, NRRA General
Counsel, on the discussions that took place within
the working group at the NAIC Winter Meeting with
regard to expansion of the LRRA.
The good news is that the NAIC working group
has decided to “table” the proposed
resolution, which opposed expansion of the LRRA.
Commissioner Wagner (Nebraska), however, indicated
that the resolution could come up again at a
later time, perhaps even nine months from now.
Our thanks to Skip Myers, NRRA General Counsel,
for his able representation of NRRA’s
interests before the working group.
There is still, however, a great deal of resistance
among certain state regulators and conventional
market forces to expansion of the LRRA. The
ability of RRGs to provide contract liability
insurance continues to be a focus of certain
regulators. Some states have even called for
greater regulation of RRGs with respect to restrictions
on authorized lines of insurance and higher
solvency standards.
In its discussions with state regulators and
the NAIC, NRRA will continue to focus on the
benefits of the RRG model as an alternative
to the conventional market. NRRA will also continue
to highlight the regulatory authority at the
disposal of both domiciliary and nondomiciliary
states preserved in the LRRA to dissuade the
NAIC from pursuing further regulation of RRGs.
The Committee urges all NRRA members to
support this effort by contributing to the NRRA
Public Affairs Fund. Your financial support
is critical to our success.
From the Government Affairs Committee,
we wish all of you a very happy Holiday Season
and much success in the New Year.
November 2003
NAIC forms working group to discuss expansion
of the LRRA - NRRA takes issue with the NAIC's
underlying premises
Submitted
by NRRA Government Affairs Committee Chair, Kevin
Brobson, Buchanan Ingersoll Professional Corp.
The National Association of Insurance Commissioners
(NAIC) Property and Casualty Insurance (C)
Committee recently formed a working group
to consider what recommendations, if any,
the NAIC should make to Congress regarding
the expansion of the Liability Risk Retention
Act (LRRA) to permit RRGs to insure other
commercial risks, such as property, and whether
RRGs should be permitted to insure contract
liability.
The decision to form a working group came
after the National Risk Retention Association
(NRRA) and captive-domicile regulators took
issue with a draft resolution that was circulated
by the Committee at the last NAIC meeting.
In addition to expressing opposition to the
expansion of the LRRA, the draft resolution
contained several broad-sweeping and inaccurate
statements about RRGs, the regulatory framework
for RRGs, and the value of RRGs in the marketplace.
In his October 15 letter to Jose Montemayor,
Texas Insurance Commissioner and Chairman
of the C Committee, Robert Myers, NRRA general
counsel, took issue with several of the premises
underlying NAIC's position. "They take
a run at the fact that risk retention groups
are owned by their insureds and therefore
there is not the diversity of risk,"
Said Myers. However, "The Mutual of Omaha
has that problem-they're owned by their risks,"
he said.
Myers explained that the most important misunderstanding
is NAIC's assumption that risk retention groups
are more prone to insolvencies than property-casualty
companies. "When you examine the facts,
you realize that licensed companies and RRGs
have a statistically comparable failure rate--about
one percent," he said.
Myers also noted that NAIC questioned whether
there is a shortage of commercial property
coverage. "Even though the marketplace
is turning around for property and is softening,
that doesn't mean there is not a demand for
commercial property coverage," he said.
The working group includes the following
jurisdictions: California, District of Columbia,
Hawaii, New York, Washington and Vermont.
More parties may be added to the working group
as it is formed.
Commissioner Montemayor asked that the working
group provide an "organizational report"
at the December meeting of the NAIC in Anaheim,
California. In addition to the matters set
forth in the draft resolution, Commissioner
Montemayor has expressed concern about captives
forming initially for one purpose and then
transforming themselves into an RRG with national
reach without adequate regulatory oversight.
Commissioner Montemayor said that the next
step is to discuss the issue and come up with
a direction. If the NAIC does decide to oppose
expansion of the LRRA, he said, "we would
take up a resolution regarding our position
and communicate it to our Congressional leadership
saying we don't think it's a good idea and
here's why."
May 2003
Work continues on broadening the scope
of the Risk Retention Act (RRA) to allow RRGs
and PGs to offer commercial property and auto
physical damage coverage. Although there are
some early indications that the commercial property
market hardening is leveling off, RRG and PG
members continue to feel the pressure of high
pricing, reduced coverage and commercial insurance
companies exiting specific markets.
The Council for the Expansion of the RRA (CERRA)
is leading the efforts in the House of Representatives
and Senate for the change in the Act. CERRA
membership includes a wide range of RRGs and
PGs, including the Housing Authority RRG, Attorney
Liability Protection Society RRG, United Educators
Insurance, RRG, Premier Hospital Insurance Group,
NRRA, RIMS, Council of Insurance Agents and
Brokers, state captive associations, state insurance
departments and numerous other RRGs and PGs
and service providers. Work is also in process
to secure the support of important trade associations.
Congressman Michael Oxley, the influential chair
of the House Financial Services Committee identified
review of the Risk Retention Act as one of the
top three priorities for his committee in this
session of Congress. In the Senate, Senators
Wyden (D-OR) and Burns (R-MO) have expressed
interest in sponsoring the change to the RRA.
A quick glance at the issues in front the Congress
this year gives a hint at the challenge we face
as we work to expand the RRA. There is a myriad
of high profile and competing issues facing
Congress. The greatest challenge for CERRA is
to raise the level of attention and understanding
of the need for this change with influential
members of the House Financial Services Committee
and the Senate Commerce Committee.
It is important to note that the expansion of
the Risk Retention Act will NOT allow RRGs or
PGs to write workers compensation or personal
lines.
What can an RRG, PG or service provider do to
help expand the RRA?
- Contact a member of the House Financial Services
Committee and tell them what the ability to write
property and auto physical damage would mean to
your RRG or PG
- Do the same to a member of the Senate Commerce
Committee
- Do the same with your individual Representative
and Senator – raising general awareness is
important
- Contribute to the lobbying efforts by sending
a check to CERRA, c/o the Housing Authority Risk
Retention Group, PO Box 189 Cheshire, CT 06410
November
6, 2002
Prior to the close of the 107th congressional
session, the Council for Expansion of the Risk Retention
Act (CERRA) was successful in securing bi-partisan
support in the Senate for the amendments to the
Risk Retention Act. Progress was also made toward
obtaining bi-partisan support in the House. CERRA's
current efforts are geared toward introduction of
free-standing bills with bi-partisan support in
both the House and the Senate early in the next
legislative session. Until the next legislative
session begins there we expect that there will be
little to no activity to report.
July
25, 2002
As you will recall, NRRA voted at
our last annual meeting to approve an effort to
amend the Liability Risk Retention Act. Since that
time, substantial progress has been made by NRRA
members and others in promoting these amendments
before Congress.
A broad coalition known as the Council for
Expansion of Risk Retention Act (CERRA) has been
formed, and it includes not just risk retention
groups but also real estate interests, consumer
groups, educational institutions, and insurance
producers. Numerous meetings and telephone communications
have been made with Senators and members of Congress
and their staffs.
When S. 2600 (the federal terrorism reinsurance
legislation) recently passed the Senate, one of
the amendments to be considered was an amendment
which would have expanded the Liability Risk Retention
Act. The Senate Parliamentarian ruled that the amendment
was not germane, and, therefore, could not be offered.
Nonetheless, the fact that Senator Ron Wyden (D-Oregon)
was interested in offering the amendment shows the
substantial progress that has been made.
Efforts are continuing to promote the risk retention
amendments. We are hopeful that we soon will be
able to get bills introduced in both the House and
the Senate.
You can help by making a contribution to the NRRA
Public Affairs Fund to support these ongoing activities.
The Public Affairs Fund relies on donations from
NRRA members and supporters and is the sole source
for funding the Liability Risk Retention Act expansion
initiative.
Please be aware that contributions to the NRRA Public
Affairs Fund for the purpose of obtaining amendments
to the Liability Risk Retention Act are regarded
by the Internal Revenue Service as “lobbying”
expenditures, as such are not tax deductible as
ordinary and necessary business expenses by donors.
In addition, you can help by writing and telephoning
your elected representatives to elicit their support.
We will keep you updated on our progress and will
contact you with further information when the time
is right for you to make these contacts.
New York Department
of Insurance Avoids Addressing the Illegality
of Section 5913 of the New York Insurance Law.
(Posted 11/21/02)
Earlier this year the NRRA became aware
of several informal opinions issued by the Office
of General Counsel for the New York State Insurance
Department, regarding Article 79 of the N.Y. Insurance
Law governing the issuance of service contracts.
NRRA reviewed those opinions and in an letter
from our General Council, Phil Olsson, expressed
concern that the Department’s position
illegally impairs the ability of risk retention
groups (“RRG”), and their members
to do business in the State of New York.
After several months the New York Department of
Insurance has replied, but not directly addressed
these concerns.
Copies of the original letter sent to the New
York Department of Insurance and a synopsis of
their response are available for download.
Download
April 16, 2000 letter from NRRA
Download
Synopsis of reply |
