WASHINGTON, D.C., Oct. 21, 2015 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) opposes the “Nonprofit Property Protection Act” introduced today by Reps. Dennis Ross (R-Florida) and Ed Perlmutter (D-Colorado) that would broadly expand the scope of the Liability Risk Retention Act to allow many Risk Retention Groups (RRGs) to offer all lines of commercial insurance. Currently, federal law only permits RRGs to offer commercial liability coverage.
“While we have great respect for both Reps. Ross and Perlmutter, this is a classic case of a solution in search of a problem and we disagree with them on this issue,” says Charles Symington, Big “I” senior vice president of external and federal government affairs. “The Big ‘I’ will oppose this unnecessary legislation that has the potential to harm consumers - not help them. Allowing RRGs to write nearly any form of commercial insurance coverage while retaining a weaker and preferential system of regulatory oversight will create an uneven playing field, distort the competitive balance within the insurance market, and, most importantly, place consumers at increased risk.”
RRGs are exempt from nearly all forms of regulatory oversight in any state outside of their domiciliary jurisdiction. They are significantly less capitalized than traditional insurers, and they are not subject to important consumer protections such as mandatory participation in state guaranty funds.
“The Risk Retention Act became law at a time when the country was facing a severe liability crisis,” says Jen McPhillips, Big “I” assistant vice president of federal government affairs. “Today, there is no marketplace need for this broad expansion which will needlessly leave consumers exposed without the protection of the state guaranty fund system - an important safety net.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing more than a quarter of a million agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.