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SIIA Announces RRG Legal Defense Initiative Contact: David Kirby SIMPSONVILLE, SC (March 26, 2008) -- Increasing illegal interference by state insurance regulators in the workings of federally enabled risk retention groups (RRGs) has prompted the Self-Insurance Institute of America, Inc. (SIIA) to establish a new legal defense fund in order to provide the self-insurance/ART industry important leverage and resources as it works to counter such serious threats.
“Unfortunately, there is no U.S. office or agency responsible for enforcing the federal Liability Risk Retention Act (LRRA) so it is up to the industry to protect itself,” said SIIA Chairman Nigel Wallbank when he announced the initiative.
Monies contributed to this fund will be segregated from the association’s general operating budget and earmarked for litigation-related efforts associated with unlawful state regulation of risk retention groups. Such efforts could include SIIA acting as a plaintiff, assisting third party plaintiffs to offset litigation costs and the filing of Amicus briefs.
Interested parties may contribute to the legal defense fund on-line at www.siia.org, or by calling 800/851-7789.
Risk retention groups (RRGs) are liability insurance companies that are owned by their members, all engaged in the same industry or profession. The LRRA allows them to operate in any state once they are licensed in one state, and preempts further state licensing challenges.
However, certain states have prevented RRGs from operating within their jurisdictions in violation of the federal preemption. States often have been successful in barring RRGs because the groups often lack the resources to sue for enforcement of their federal rights.
Recently California prevented operation there by an RRG licensed in Montana to provide insurance against excess liabilities of members’ employee benefit plans. A federal judge in California granted temporary relief of the state’s order to cease operations, but additional legal proceeding are expected.
SIIA is a national trade association that represents companies involved in the self-insurance/ alternative risk transfer industry. Additional information about the association can be accessed on-line at www.siia.org, or by calling 800/851-7789. ### |
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