The provisions of the Act?
The LRRA requires that members be homogeneous, i.e. engaged in similar businesses or activities that expose them to similar liabilities.
- Liability insurance only: Coverage provided by a RRG must be restricted to liability insurance, which is very broadly defined. Personal Risk Liability, Worker’s Compensation and Employers Liability, and Property & Casualty coverages are specifically forbidden to be underwritten by a RRG.
- State of Domicile: A RRG must be a corporation or limited liability association chartered and licensed as a liability insurer and authorized to do business as an insurance company in its state of domicile.
- Primary purpose and activity: The primary activity of an RRG must be the business of assuming and spreading all, or a portion of the liability exposure of its group member and its primary purpose must be the assumption and spreading of risk related insurance activity.