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15th of May 2012

GAO report disappoint RRGs

Vicky Beckett 13/01/2012

A Government Accountability Office report was not as decisive in assessing states overriding federal regulation as many of the risk retention group community had hoped.
 
The report said Congress should consider the merits of clarifying certain Liability Risk Retention Act (LRRA) provisions regarding registration requirements, fees, and coverage.
 
The findings were a “little weaker” than was hoped by Gary Osborne, president of USA Risk Group. “But it is at least a step in the right direction. I am not, however, optimistic that Congress will do much in an election year.”
 
Risk retention groups (RRG) have repeatedly challenged non-domiciliary states, insisting some state requirements are not permitted in the federal LRRA.
 
The report said: “Some regulators with whom the GAO spoke indicated that their actions towards non-domiciled RRGs reflect an effort to use their limited regulatory authority to protect insureds in their states as well as address concerns about RRG solvency.”
 
“The GAO has found there is a problem,” said Robert Myers, general counsel for the National Risk Retention Association. “We recommend that the Treasury exercise oversight, but we will have to see whether the report will create an incentive for Congress to act.

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