Risk retention conventions such as the $250,000 per occurrence loss limit is practically institutional (thousands of companies retain this figure through large deductibles, retroactive plans or captives, but few actually know whether it is the right one! In conclusion, as retention and insurance have their own advantages and disadvantages, the frequency probabilities and severities of risks determine which methods of risk financing should be used. Exemption from State Laws. A captive is special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners. As a Government IT Contractor, you’re responsible for ensuring your company is protected from liability claims. Broader coverage than what is available in the regular insurance market. Self Control. If the Risk Retention Group fails then re-entering the commercial insurance market can be more costly with less broad coverage. Risk reduction - probably more properly called risk mitigation for project managers. The way today’s workforce approaches “work” is different than past … In addition, should the risk retention group fail, re-entering the commercial insurance market can be more costly with less broad coverage. The Risk Retention Act allows Risk Retention Groups to be formed and to be exempt from state laws. As insurance companies owned by their members, some of the key advantages offered by Risk Retention Groups to their members include: There are also several considerations when setting up an RRG including the fact that the experience of one member can lead to all members having to pay extra premiums. Stability of Cover Improved loss control and risk management programs… Benefits of Having a Record Retention Schedule . ). We successfully manage Midwest Insurance Group, Inc., an RRG owned by its member companies. Here are some of the advantages of risk retention groups: Businesses can tailor insurance policies to their own needs. Insurance premiums are also distributed among the members of the group, ensuring that … Student loan assistance. The Act was passed in response to soaring premium costs imposed by insurers, leading many businesses unable to afford or even obtain coverage in the traditional market. 5875 Castle Creek Parkway North DriveSuite 215, Indianapolis, IN 46250Phone: 317.575.4440FAX: 317.575.4454Email: info@caitlin-morgan.com, ©2020, Caitlin Morgan, All Rights Reserved, Privacy Policy   |   Terms & Conditions   |   Site Map. A risk retention analysis can be helpful for determining the optimal level of risk for your organization, whether you are self-insured, a captive, or a risk retention group. Once licensed by its state of domicile, an RRG can insure members in all states. By developing and implementing a record retention schedule, an organization can: Improve their overall utilization of resources; Control the growth of records volume Re-entry into the Traditional Insurance Marketplace. We will help you assess the advantages and disadvantages of different levels of risk retention, such as the excess premium savings a higher retention level may bring. Minimizing risk however possible protects company finances, branding, and reputation. Insurance options can be broader, offering coverage for hard-to-place or unique risks. 5 Benefits of Risk Retention Groups. As risk Retention Groups are owned by their members, profits are retained by policyholders rather than being passed to a commercial insurer. The group was formed in Indiana to provide the healthcare industry – assisted living, residential communities and nursing homes – with an alternative to rising Professional and Medical Malpractice Liability costs. Risk retention, (aka active retention, risk assumption), is handling the unavoidable or unavoided risk internally, either because insurance cannot be purchased or it is too expensive for the risk, or because it is much more cost-effective to handle the risk internally. The urges of self-pleasuring are the strongest, according to some researches done in … Caitlin Morgan specializes in providing alternative solutions to clients, including captives and risk retention group. Other RRG benefits include: Profits are retained by policyholders and members of the RRG. The reasons risk retention can be beneficial are: There is a charge for risk transfer to an insurance company, which is generally 40% to 50% more than is paid in losses, depending on the type of coverage and the amount of premium involved. Turnover brings disruption in customer service, loss of business and possible negative business impacts. A Caitlin Morgan representative will contact you immediately. An organization’s customer base expects consistent and reliable service. Risk retention is a term from the insurance industry. Your first question might be, "What does Risk Retention Group (RRG) really mean?" In addition to the direct effects of a more veteran workforce, each of your retention efforts shows your employees that they are valued. Broader coverage than what is available in the regular insurance market. It’s different from customer acquisition or lead generation because you’ve already converted the customer at least once. The Disadvantages of Risk Retention Groups, Poor Underwriting Results from other Members. Effective loss control/risk management programs. Other techniques used for other types of risk (e.g., credit, operational, interest rate risks) include financial tools such as hedges, swaps, and derivatives. Although risk retention groups are a type of captive, these are the three reasons why other captives offer more advantages. 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