What is Risk Retention Group?

An Risk Retention Group (RRG) is an insurance company chartered by a state that provides insurance for commercial businesses and government entities for liability risks. RRGs were established by the Liability Risk Retention Act in 1986, requiring members to be businesses.


Risk retention groups are handled in a distinct manner compared to regular insurance companies. They are not required to acquire a state license in each state they operate in, and they are also exempt from state insurance regulations.

Risk retention groups are mutual companies, which means that the members of the group own them. They can obtain a license as a regular mutual insurer or as a captive insurer, which is a company formed by a parent company solely to offer insurance coverage to the parent company.

The amount of risk retention groups may rise when insurance is not accessible or too expensive. Although they may be favored in certain business environments, they still need to comply with specific state rules, such as non-discrimination and anti-fraud obligations. Risk retention groups might also have to furnish regulators with additional financial details to guarantee their financial stability.

Benefits of RRG

  • Program control
  • Long-term rate stability
  • Customized Loss control and risk management practices
  • Dividends for good loss experience
  • Access to reinsurance markets
  • Stable source of liability coverage at affordable rates
  • Multi-state operations


Risk Retention Groups (RRGs) are essentially member-owned insurance companies designed for businesses with similar liability risks. They allow these businesses to pool their risks and act as their own insurer, offering an alternative to traditional insurance. RRGs were created due to a lack of traditional insurance options in the late 1970s, and are subject to federal regulations under the Liability Risk Retention Act.