ENCINO, Calif. – On March 6, 2017, NRRA filed yet another Amicus Curiae Brief in support of Restoration RRG in its Appeal before the 7th Circuit Court of Appeals in Chicago. In the case of Restoration Risk Retention Group vs. Ross & the Wisconsin Department of Safety and Professional Services (DSPS), Restoration is challenging a prior action by the DSPS for its discrimination against RRGs.

Restoration is the RRG insurer of ServPro franchisees. ServePro provides building remediation services for property losses and has been registered (authorized) to conduct business in Wisconsin since 2006. A 2015 decision by the Trade Credentialing Unit (TCU) of DSPS, however, denied a contractor’s license to a ServPro franchisee, based upon Wis.Stat.§101.654(2)(a). The denial can be interpreted as potentially prohibiting all non-Wisconsin charted RRGs from insuring dwelling contractors and with implications beyond contractors. §101.654(2)(a) had been on the books in Wisconsin for almost 20 years with no prior enforcement activity.

As argued in its Amicus Curiae (“friend of the court”) Brief, NRRA commissioned the Risk Retention Reporter to perform a study demonstrating a pattern of systemic discrimination against RRGs in Wisconsin. The study was based on National Association of Insurance Commissioners (NAIC) filings and data compiled by the Reporter. The Amicus Brief provides empirical evidence that Wisconsin actually is an outlier with only 58 RRGs registered. This is less than any state except Alaska, which has less than 13% of the population of Wisconsin. Wisconsin also has a lower amount of RRG premium per resident than any other state, including Alaska. Statistics also were presented comparing Wisconsin to the other two states in the 7th Circuit, as well as surrounding states to underscore its conclusion that there is an adverse environment for RRGs operating in Wisconsin and that certain sectors, including property development, appear to be particularly impacted by Wisconsin policies. NRRA concludes that the OMIC decision, infra, has contributed to discriminatory treatment of RRGs in Wisconsin and should be distinguished by the Court as requested by Restoration in its brief.

Restoration claims that §101.654(2)(a), allegedly designed to preserve “financial responsibility,” is expressly preempted by the LRRA because it can be used to discriminate against RRGs as a class. The federal district (trial) court, in a motion for summary adjudication, ruled that the 1998 decision set forth in Opthalmic Mutual Insurance Company vs. Musser (OMIC) had to prevail because it was the “law of the Circuit.” This decision was made despite multiple prior decisions in other Circuits concluding otherwise, led by National Warranty vs. Greenfield, a seminal case on the same discrimination issue in Oregon (9th Circuit), but which are not considered “binding” on Wisconsin, located in the 7th Circuit. The district court acknowledged that the OMIC decision, however, had not actually adjudicated the “discrimination” issue. Restoration’s exhaustive appellate arguments also challenged the DSPS’ newfound and subjective interpretation of §101.654(2)(a), demonstrating how that “interpretation” is inconsistent with the plain language in the statute itself which is being used to require contractors to be insured by “licensed and admitted” carriers in Wisconsin. The briefing also delivers an extensive review of the congressional purpose and cases that have correctly interpreted the LRRA express preemption of activity that is discriminatory by the states.

The 19-year old OMIC decision has been specifically criticized by the 9th Circuit in the Greenfield and Alliance of Nonprofits for Insurance (ANI) decisions, as well as the 2nd Circuit in Wadsworth and in other cases including the 4thCircuit.  OMIC was also based on a now unrelated former Wisconsin statute affecting only “medical professional liability” carriers, but that statute was revised in 2015 by Wis. Stat. § 655.23(3)(am), expressly permitting RRGs to insure health care providers for MPL.

NRRA, which has persuasively submitted amicus briefing in many of the successful cases on LRRA preemption thus far, will continue to monitor the progress of this case and report accordingly to its members.


The National Risk Retention Association (NRRA) was formed in September 1987 as a 501(c)(6) non-profit trade association and is the only national association dedicated to the successful development, education and promotion of U.S. domiciled alternatives to traditional liability insurance. NRRA provides high-level, rapid advocacy and a forum where the country’s most knowledgeable individuals in risk retention insurance may exchange valuable and timely information. For more information, visit www.riskretention.org and see details on NRRA’s Annual Conference on September 26-28, 2017 at the Sofitel Chicago Magnificent Mile Hotel. This year’s theme: “Business to Business – the NRRA Edge.”

For further information on NRRA’s advocacy and member services, contact NRRA Executive Director Joe Deems by phone at (818) 995-3274, email at joe.deems@gmail.com, or by visiting www.riskretention.org.