February 2012 Newsletter

February 1, 2012

 

NRRA enters the year with challenges and opportunities. Some states continue efforts to restrict RRG operations and oppose the industry in the courts -- witness the pending appeal of the Nevada federal District Court's summary judgment in favor of RRGs in the ANI case. NRRA is leading the industry in supporting the lower court decision.

In fact, with the recent decision by California to now reject ANI's registration in that state, despite years of operating there, it is anticipated that NRRA's Chairman and new Executive Director will issue a call to action in the near term.

The Government Accountability Office report on RRGs cited the need to update the Liability Risk Retention Act but did not go far enough in affirming the operating authority of RRGs.

The Risk Retention Modernization Act (HR 2126) has been introduced in the House but efforts continue to find sponsors in the Senate.

NRRA is proactively taking on these challenges with our newly appointed Executive Director, Joe Deems, our General Counsel, Robert "Skip" Myers, a more aggressive public/media campaign and a Board of Directors whose members are actively involved in speaking for the industry.  The year began with our response to the GAO report:

January 2012

GAO Report Cites Need for Congress to Update Liability Risk Retention Act

NRRA issued a strong release stating the GAO report did not go far enough in affirming the authority for RRGs to operate nationally with only limited regulation by states where RRGs are not licensed. "We're pleased that the GAO has recommended Congressional action but disappointed that the agency's report failed to take a strong position in support of RRGs where certain states have imposed requirements that clearly are in direct conflict with the federal law," said Sanford Elsass, NRRA Chairman.

Others have observed that the report inexplicably conflates issues to support a suggestion that a lack of clarity exists in portions of the LRRA where no such ambiguities exist.

"Clearly, the time has come for Congress to act.  We have had legislation pending before the congress for three years -- not to clarify "ambiguities," but rather to establish a dispute resolution mechanism to deal with state actions that violate the federal law! Currently, the only way for RRGs to assert their rightful authority is through costly litigation," said Joe Deems, NRRA Executive Director. Deems also noted that, the GAO permitted the NAIC to offer rebuttal "comments" to the report, but did not afford the same opportunity to NRRA, as suggested under its own guidelines. NRRA's Government Affairs Committee is formulating its response to the report.

ANI Update

In what is being perceived as a direct act of "retaliation" against ANI for filing its appeal in the Nevada case, California has now rejected ANI's registration in that state.   ANI's opposition is supported by extensive amicus briefing led by NRRA, with the support of associations NCIA, VCIA, and CICA, the state of Vermont and two of the largest RRGs, United Educators and Housing Authority RRG.  Similar to what happened in Nevada, ANI has been registered in California for years - until now that the industry has demonstrated California's long standing ideological bias against RRGs before the 9th circuit.  It will be interesting to see the industry's reaction to this latest act of discrimination, Deems said.

Purchasing Groups Update

NRRA's standing committee on Purchasing Groups has continued its investigative focus on the registration practices and excessive "fees" being illegally imposed in instances by a number of states.  Committee Chairman and newest NRRA Board Member, Mike Schroeder, Chairman of Allied Professionals RRG which is affiliated with multiple purchasing groups, advises that efforts are underway to incorporate a number of PG topical issues into the program for NRRA's 2012 annual conference.  "Registration violations as to PGs will definitely be part of the program," he says.

NRRA Coalition Committee Update

2012 is going to be a "game-changing" year for the industry. While NRRA will continue to play its ongoing significant role in judicial, regulatory and legislative advocacy for our members, "the outcome of ANI, the GAO report, NAIC amendments and the pending federal legislation will potentially change the landscape as we know it," said Wendy Fisher, Chair of the Coalition.

In order for NRRA to continue in its key role of promoting and protecting the interests of RRGs and purchasing groups, it must raise enough funds to be an effective advocate at both the federal and state levels.  These battles are not cheap and we need to strengthen our war chest in order to continue to move forward.

The NRRA Coalition Committee is initiating its 2012 fundraising campaign to solicit absolutely necessary donations to the Coalition Fund to support NRRA's initiatives.  More details will follow soon.

2011 - - YEAR IN REVIEW


 

NRRA took on major challenges in 2011 and won significant victories for the risk retention industry.

 

A Nevada Insurance Department order that would have put the Alliance for Non-Profits Risk Retention Group (ANI) out of business was rejected by the Federal District Court in a ruling that upheld federal preemption of state regulation in this case. The Nevada action added to the previous federal court decisions in other jurisdictions that have upheld RRGs operating authority in the face of encroachment by non-domiciliary states.

 

Governor Christie of New Jersey sent back to the legislature a bill that would have imposed burdensome fees on RRGs in violation of the Liability Risk Retention Act of 1986 (LRRA). In these major challenges to RRGs, NRRA spoke for the industry and won.

 

On the legislative front, the Risk Retention Modernization Act (HR 2126) was introduced to enable RRGs to write commercial property insurance and to create a dispute resolution mechanism that would put some teeth in the LRRA. Again, NRRA is leading the industry campaign to get this legislation enacted.

 

The NRRA annual conference broke all records with more attendees and active sponsors than ever before. It provided a platform for industry leaders to speak out on issues and generated extensive media coverage.

 

At the same time, the NRRA Board undertook a more proactive external communications program to support the Association's position on major issues and complement its long-standing, effective judicial and public policy advocacy activities.

 

Joe Deems, Chairman of NRRA's Government Affairs Committee, assumed responsibility as Executive Director with a mandate to build legislative support for NRRA objectives and increase the membership base.

 

All in all, 2011 was a year that created a foundation for positive action on the legislative front and sent a message that NRRA will defend successfully any court challenges to RRG operating authority. Some details follow:

 

February 2011

 

NRRA Joins Action to Prevent Nevada Insurance Department from Restricting RRG Operation

 

In an Amicus Brief, NRRA requested a federal court order to prevent the Nevada Insurance Department from enforcing a cease and desist order that would restrict the right of a Vermont-chartered Risk Retention Group to operate in Nevada under the Liability Risk Retention Act of 1986. NRRA sought an injunction against enforcement of the Nevada Insurance Department order that would require the Alliance for Non-Profits for Insurance RRG that writes auto liability insurance for non-profit organizations to obtain a fronting arrangement with an insurance company that holds a Nevada Certificate of Authority in order to do business in the state.

 

NRRA Calls for Federal Action to Halt Interference by Some States in Risk Retention Group Operations

 

NRRA is calling for federal legislation to enforce the Liability Risk Retention Act of 1986 against continued interference by some states in the lawful operation of RRGs, Brian Braley, Chairman of NRRA, reported. "The Act gave RRGs freedom to do business nationally when licensed in a single state but as the industry grew, some states imposed burdensome requirements on RRGs that violate the will of Congress. Unfortunately, the Act did not provide for enforcement, but in the face of continued actions by some states, it's time to amend the LRRA to allow RRGs to function as Congress intended," Braley said. The various actions taken by some states to encroach upon RRG operating authority were detailed in a letter to the Government Accountability Office by NRRA General Counsel Robert H. Myers, Jr.

 

March 2011

 

New Jersey Assembly Bill Violates Federal Law, NRRA Asserts

 

NRRA advised Governor Chris Christie of New Jersey that a bill pending in the State legislature would discriminate against RRGs in direct violation of federal law. In a letter to the Governor, Robert H. Myers, Jr., NRRA General Counsel, stated that an amendment to Assembly Bill 1471 requiring taxicab drivers to obtain insurance from an insurer that is a member of the New Jersey Property-Liability Guaranty association would discriminate against RRGs "in a manner prohibited by federal law." The federal law expressly prohibits RRGs from becoming member of state Guaranty Associations, Myers wrote.

 

May 2011

 

Legislative / Regulatory Restrictions on Risk Retention Groups Rejected in New Jersey and Nevada

 

NRRA reported that Governor Chris Christie sent back to the Assembly legislation that would discriminate against RRGs and Nevada Insurance Commissioner Brett Barratt rejected a proposal to impose fees on RRGs that would violate the federal Liability Risk Retention Act of 1986. "We commend Governor Christie and Commissioner Barratt for taking decisive action to eliminate state mandates not permissible under the LRRA that could have led to lengthy and expensive litigation," said Brian Braley, NRRA Chairman.

 

June 2011

 

Leading Industry Associations Welcome Legislation to Modernize Federal Regulation of Risk Retention Groups

 

NRRA, the Self-Insurance Institute of America, and the Risk and Insurance Management Society collectively welcomed the introduction in Congress of HR 2126, "The Risk Retention Modernization Act," which would allow RRGs to write commercial property coverage, would establish a federal dispute resolution process and would provide  governance standards for RRGs.  "NRRA is hopeful that this legislation will facilitate dispute resolution between RRGs and some of the states that choose not to adhere to the limitations imposed on them by federal law," said Brian Braley, NRRA Chairman.

 

July 2011

 

NRRA Hails Federal Court Decision Upholding Risk Retention Group's Right to Do Business in Nevada

 

NRRA commended the decision by the U.S. District Court to permit a Risk Retention Group to continue operations in Nevada despite a state order that would effectively have put it out of business. In granting a motion for summary judgment by the Alliance of Non-Profits for Insurance RRG (ANI), Judge James Mahan ruled that the federal Liability Risk Retention Act of 1986 preempts Nevada statutes and regulations prohibiting ANI from issuing first dollar auto liability insurance in the State.NRRA had filed an Amicus  Brief in the case setting forth the industry position.

 

September 2011

 

Nevada Captive Insurance Association Honors NRRA

 

NRRA and its general counsel, Robert H. Myers, Jr received the Nevada Captive Insurance Association's Alice Molaski-Arman Award at the Association's annual convention. The award recognized NRRA's influential role over the years in defending the authority of RRGs to operate nationally when licensed in a single state. The award also cited NRRA and Myers for contributing to the establishment of Nevada as a domicile for RRGs.

 

Legal and Regulatory Reference Guide Published by Risk Retention Reporter and NRRA

 

A compendium of legal cases and regulatory issues affecting RRGs and Purchasing Groups since enactment of the federal Liability Risk Retention Act of 1986 has been published by the Risk Retention Reporter and NRRA. The compendium is a one-stop source of detailed historical information on 26 disputes between RRGs/PGs and state regulatory authorities. The new publication is titled Risk Retention Legal & Regulatory Compendium -- A Comprehensive Guide to State Actions Affecting RRGs and PGs. It is available as a CD-Rom with a searchable PDF file from www.rrr.com/publications.

 

October 2011

 

Braley Calls for Action to Modernize Risk Retention Act During Most Successful NRRA Conference to Date

 

Brian Braley, NRRA Chairman, called on members attending the annual conference to join the campaign to generate support for the Risk Retention Modernization Act (HR 2126) now before the Congress. Braley pointed to NRRA's important role in defending RRG operating authority this year, but exhorted members to become active advocates of the legislation.  The 2011 annual conference, which enjoyed a record attendance and a new record for sponsorships, was rated by the attendees as the best to date. 

 

Deems Named NRRA Executive Director

 

Joseph E. Deems, a long-time spokesman for NRRA and Chairman of the Association's Government Affairs Committee, has been appointed Executive Director of the Association, Brian Braley, NRRA Chairman, announced at the Association's annual conference. "We are exceedingly pleased that Joe has agreed to take the helm at NRRA. This is a critical time for RRGs as we defend the industry against any attempted infringement of RRGs' authority to operate. His long experience in litigation and transactional negotiations along with his deep knowledge of the industry after leading NRRA's Government Affairs Committee for years will give strong direction to our organization as we move forward," Braley said.

 

Elsass Elected NRRA Chairman

 

Sanford Elsass, President of Uni-Ter Underwriting Management Corporation, was elected Chairman of NRRA at the Association's annual conference. Uni-Ter manages RRGs in the healthcare industry. He is a member of NRRA's Board of Directors and Chairman of the Annual Conference, which set attendance records under his leadership.

 

December 2011

 

National Risk Retention Association Reports to Federal Insurance Office on Need for RRG Reform

 

Modernization of the federal law that allows RRGs to operate nationally when licensed in a single state is essential to stop a number of states from interfering with RRG operations in violation of the law, NRRA advised the newly formed Federal Insurance Office (FIO). In a letter to Michael McRaith, FIO Director in the Treasury Department, NRRA cited a long record of states encroaching on RRG operating authority. "Even though the law may be relatively clear, there is no immediate remedy for RRGs against state regulators for failure to obey it," we wrote. The NRRA letter was written in response to a call by FIO for public input to Congress on how to modernize and improve the system of insurance regulation in the U.S.

 

Industry Associations Ask Appeals Court to Affirm District Court Decision Upholding RRGs Right to Operate

 

Four industry associations filed an Amicus Brief asking the federal Ninth Circuit Court of Appeals to uphold a decision by the Nevada District Court to allow an RRG to continue operating despite the State's effort to shut it down. NRRA, the Nevada Captive Insurance Association, the Vermont Captive Insurance Association and Captive Insurance Companies Association jointly called upon the Circuit Court to uphold the lower court ruling that the federal Liability Risk Retention Act of 1986 preempts a cease and desist order by the State regulatory authority to deny the Alliance of Non-Profits for Insurance RRG the right to issue first-dollar auto liability insurance without being licensed in the State. NRRA General Counsel Robert H. Myers, Jr. wrote the brief representing the four associations. Amicus briefs were filed also by United Educators Insurance RRG and the Housing Authority RRG, two of the nation's largest RRGs. The Vermont Department of Banking, Insurance, Securities and Health Care Administration, the nation's largest captive insurance regulator also filed a brief in support of the lower court.



Media Contact: Mechlin Moore, NRRA Communications Director (239-777-1595; mooremechlin@gmail.com).

   

2012 - - YEAR OF CHALLENGE AND OPPORTUNITY


 

2012 Annual Conference To Be Held At The Ritz Carlton Pentagon City


 Article Subheading

SAVE THE DATES: October 9-11, 2012! Once again, the NRRA 2012 Annual Conference will take place at the beautiful Ritz Carlton Pentagon City.  The Ritz has been our conference venue the past two years and many attendees are delighted that NRRA is returning this year.     

 

Attendees of NRRA's annual conference will be able to book rooms at a discounted rate. A limited number of government rate rooms are also available.    

 

The Ritz Carlton Pentagon City is conveniently located at the Pentagon City Metro Station two stops from National Airport (DCA) on the Blue or Yellow line ($1.95 fare).  Alternatively, the hotel can be reached by a short (1.7 mile cab ride) from National Airport.

 

2012 Conference Sponsorships Available Now! 


 

NRRA's 2012 Conference will be held October 9-11, 2012 in Washington DC at the Ritz Carlton Pentagon City.

Sponsorships are available now.  

Because of the record number of sponsors from our 2011 Conference, NRRA Chairman, Sandy Elsass, has appointed a Sponsorships Committee to work closely with the 2012 Conference Committee in coordinating program activities and topics.  Contact Rod Nofziger, NRRA Vice Chairman and Chair-Elect who is serving as this year's Conference Chairman. He can be reached at:  Rod_Nofziger@ooida.com.

Otherwise, contact info@riskretention.org with questions about the sponsorship opportunities. 

 

Not yet a NRRA Member?


 

This is a great time to join!

 

We are the only national membership association focused specifically on the risk retention and purchasing group industry.  NRRA is a dedicated and proactive advocate for RRGs and RPGs that works on behalf of members to ensure that the rights afforded under the Liability Risk Retention Act are not infringed upon.

 

Some of the benefits NRRA membership include discounted rates to attend the annual conference, legislative and state insurance department representation, access to useful resources, and opportunities to network with industry peers. 

 

Contact info@riskretention.org for more information about NRRA membership.  

 

Or click here for the Membership Application. 

 

 

 

2011 Sponsors


Diamond Sponsors:

Johnson Lambert & Co

Lewis Brisbois Bisgaard & Smith

US Re Companies

 

Platinum Sponsor:

Delphi Technology

 

Gold Sponsors:

A.M. Best, Amlin Underwriting Limited, Aspen Re, Beazley, Besso Re Limited, Independent Broking Solutions, Ltd., Lloyd's America Inc., Logan Capital, Milliman, Morris Manning & Martin LLP, Prime Advisors, Saslow Lufkin & Buggy, Swiss Re, and Uni-Ter

 

Silver Sponsor:

Deloitte, GPW, Munich Re, Risk Services, TransAtlantic Re, VCIA 

 

Bronze Sponsor:

BMS Intermediaries, Imperial PFS, Housing Authority Insurance Group, OMIC

 

Friend of NRRA:

Char Hamilton, Lenders Protection Assurance Company RRG, MedAmerica Mutual, Spring Consulting Group, Strategic Risk Solutions, Gen Re, Praxis Claims Consulting

 

Sponsorships for 2012 will be available shortly.  NRRA and all our members sincerely thank our generous sponsors.