Glossary

What is Risk Retention Group?

A liability insurance company owned by its policyholders, all of whom are in the same business or profession.

Full Definition

A Risk Retention Group (RRG) is a liability insurance company owned by its policyholders who share a common business, profession, or activity. Authorized by the federal Liability Risk Retention Act of 1986, RRGs are licensed in one state but can operate in all states without obtaining separate licenses. RRGs can only write liability coverage — not property or workers' compensation. They are commonly used in healthcare (physician-owned malpractice RRGs), childcare, and other professional liability segments where commercial market availability is limited. Members share in both the risk and the potential underwriting profits of the group.

Related Terms

Surplus Lines

Admitted vs. Non-Admitted Carrier

Captive Insurance

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Related Coverage & Services

Surplus Lines

Insurance placed with non-admitted carriers that are not licensed in the state where the risk is located, used for hard-to-place or unusual risks.

Admitted vs. Non-Admitted Carrier

Admitted carriers are licensed and regulated by the state insurance department; non-admitted carriers operate in the surplus lines market with fewer regulatory requirements.

Captive Insurance

A wholly owned subsidiary insurance company created by a business to insure the risks of its parent company and affiliates.

Business Insurance

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