FAQs

1.  What is a Risk Retention Group?

A risk retention group (RRG) is a liability insurance company that is owned by its members. Each member of the RRG must be of similar trade. Golden Insurance Company, RRG is made up of members of the construction fields (General Contractors, Artisans and Builders). Under the Liability Risk Retention Act (LRRA), RRGs must be domiciled and licensed in a particular State (Golden is domiciled in Nevada) and can issue insurance in other States after complying with that State’s registration process.  RRGs must comply with the State of domicile’s regulatory reporting requirements of RRGs and also file annual reports in the other States where it is registered.  RRGs are not required to be rated and are generally non-admitted.
 

2.  What are the Advantages of RRGs?

Since RRGs are owned by the members, and each member must be of similar trade, some of the key advantages offered by the RRG company relate to the control over the liability program(s).  This control often translates into higher standards of underwriting, lower rates, broader coverage, effective loss control & risk management and stability of coverage in shifting market cycles.

3.  What is the Membership Agreement and 5% fee?

To join the RRG, each policyholder pays a capital charge in addition to premium that gives them certain rights of ownership.  This helps to capitalize the program and each member benefits from the higher capitalization.  The Membership Agreement is standard practice and basically outlines the terms of joining the RRG membership. Although members participate in the group, members are not responsible for any losses or liabilities to other parties in the group.

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