Risk Retention Group (RRG)
A Risk Retention Group (RRG) is a liability insurance company owned by its policyholders, who share similar exposures and band together to self-insure. Healthcare providers often form RRGs to obtain medical malpractice coverage on favorable terms.
What is a Risk Retention Group (RRG)?
A Risk Retention Group (RRG) is a liability insurance company owned by the very policyholders it insures, all of whom share similar types of risk. Instead of buying coverage from a traditional commercial insurer, members pool their resources to insure themselves collectively under a single entity.
RRGs operate under a federal framework that lets them form in one state and provide liability coverage to members across multiple states. Their membership is typically limited to businesses or professionals with comparable exposures, which keeps the pooled risk relatively homogeneous.
Why do healthcare providers use Risk Retention Groups?
Medical malpractice coverage can be expensive and, at times, hard to obtain on stable terms from the commercial market. By forming or joining an RRG, physicians, surgery centers, and other providers can gain more control over their coverage, pricing, and claims handling.
Because the members both own the group and bear its risk, an RRG can offer coverage tailored to their specialty and align incentives around loss prevention. This shared-ownership model often delivers more predictable premiums for providers facing a volatile liability insurance market.
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