# Risk Retention Group Insurance: What Changes When Your NEMT Liability Comes From One

Canonical URL: https://nemtguide.com/glossary/risk-retention-group/ · Updated 2026-10-06

A risk retention group (RRG) is a liability insurance company owned by the businesses it insures. It is chartered in one state, and the federal Liability Risk Retention Act lets it sell in every other state once it registers there. For a NEMT company it can write auto and general liability, but not workers' comp or damage to your own vans, and no state guaranty fund backs it.

- An RRG is owned by its policyholders, so buying a policy makes your company a member and an owner.
- It writes liability only. Workers' comp and physical damage on your vans must come from another insurer.
- Federal law keeps RRGs out of state guaranty funds, so if the group fails, no fund pays its open claims.
- Some contracts require an insurer licensed in their state, such as Hamilton County, Ohio's NET bid, so get each contract's answer in writing before you buy.
- An RRG's name should include "Risk Retention Group" (some use "RRG"), and your state insurance department can confirm whether it is registered there.

Sometimes an agent shopping your auto liability comes back with a quote from an insurer whose name includes "Risk Retention Group" or "RRG." That label tells you who owns the insurer, what it is allowed to cover, and which protections you give up by buying from it.

## What a risk retention group is

The Liability Risk Retention Act, at 15 U.S.C. 3901, defines it. An RRG is a company whose main business is taking on and spreading the liability risk of its own members, and it has five traits:

- **Its policyholders own it.** Its owners can only be the members it insures, or an organization those members own. The NAIC puts it plainly: every insured of an RRG is also an owner, and every owner must be insured.
- **Its members share a line of work.** They must face similar or related liability because of a similar or common business.
- **It is chartered in one state.** It is licensed as a liability insurer under that state's laws, and that state regulates how it is formed and run.
- **It sells in other states by registering.** Before it offers insurance in another state, it sends that state's insurance commissioner its plan of operation, registers, and names the commissioner as its agent for legal papers. Each year it sends every state where it does business a copy of its annual financial statement, certified by an outside public accountant (15 U.S.C. 3902). The NAIC says it can then write business there without a license (page updated October 13, 2025).
- **Its name says so.** Federal law says the name must include the phrase "Risk Retention Group." Rhode Island's October 2026 list also shows some names with the short form "A RRG," so look for either.

A risk purchasing group is a different thing. It is a group of similar businesses that buys liability insurance together for its members, and it is not an insurer itself.

## What an RRG can and cannot insure for a NEMT company

An RRG may provide liability insurance only. Federal law defines liability as legal liability for damages because of injuries to other people or damage to their property, arising from your business. That fits two of a NEMT company's core policies:

- **Commercial auto liability**, which pays when your van hurts a rider, another driver, or someone's property.
- **General liability**, which pays for injuries and damage your operations cause outside the van, such as a fall at your office.

It leaves out two others:

- **Workers' compensation and employer's liability.** The law's definition of liability excludes an employer's liability to its own employees. See [workers' comp for NEMT](https://nemtguide.com/guides/workers-comp-for-nemt/).
- **Physical damage to your own vans.** Collision and comprehensive coverage pay for your property, not for harm to others, so they fall outside liability insurance.

So a company that buys its auto liability from an RRG still needs at least one other insurer. Compare quotes as a package, not line by line.

## What changes when your liability comes from an RRG

The coverage on paper can look the same as a licensed insurer's policy. Four things around it change:

- **No guaranty fund.** Federal law keeps RRGs out of the insurance insolvency guaranty associations that licensed insurers must join (15 U.S.C. 3902). Any state may require each RRG policy to carry this notice, in 10-point type: "This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your State. State insurance insolvency guaranty funds are not available for your risk retention group." Texas shows the stakes: if a licensed insurer fails, its policyholders are protected up to $300,000 per claim by the state's guaranty association, and an RRG's policyholders are not (Texas Department of Insurance guide, updated January 20, 2021). If an RRG fails in the middle of a crash claim, no fund steps in, and the claim can land back on your company.
- **Less oversight from your own state.** Federal law gives your state a short list of powers over an RRG chartered elsewhere, such as collecting premium tax, applying its unfair claim settlement and deceptive practices laws, requiring registration, and in some cases an exam. Beyond that list, your state cannot regulate how the group operates. The home state does that. The Texas Department of Insurance says the rates and policy forms of risk retention groups are not regulated.
- **You become an owner.** Owners and insureds are the same people, so your company joins the group when it buys a policy. Ask what membership involves before you sign.
- **Your agent still needs a license.** A state may require anyone selling for an RRG to hold its agent or broker license, though it may not treat nonresident agents worse (15 U.S.C. 3902).

Surplus lines insurers share the first gap in Texas, and [NEMT insurance cost](https://nemtguide.com/guides/nemt-insurance-cost/) explains how those quotes differ from a licensed insurer's.

## Will a broker, health plan, or county accept an RRG?

Contracts set rules about the insurer, not only the limits, and many name licensed insurers. Read the exact words:

- **Hamilton County, Ohio.** The county's December 2025 request for proposals for NET rides (KB05-25R) says insurance must come from a company licensed to provide insurance in Ohio, rated no lower than A-: VII by A.M. Best. An RRG chartered in another state registers in Ohio rather than holding an Ohio license. See [Hamilton County NET rides](https://nemtguide.com/states/ohio/hamilton-county/).
- **Arizona health plan subcontracts.** AHCCCS's minimum subcontract provisions (effective October 1, 2024, revised January 9, 2025) want insurers licensed in Arizona or approved as non-admitted on the state's List of Qualified Unauthorized Insurers, with an A.M. Best rating of A- VII or better.
- **State insurance filings.** Kentucky takes operating authority filings from insurers "authorized to transact business" in Kentucky (KRS 281.655), and Missouri can ask the insurer for proof that it is duly authorized to transact business in Missouri (7 CSR 265-10.030, amended effective July 30, 2024). If your authority depends on a [Form E filing](https://nemtguide.com/glossary/form-e-filing/), ask the motor carrier office whether it accepts one from a registered RRG.
- **Rating floors.** Several programs want an A.M. Best rating of A- or better, as [NEMT insurance requirements](https://nemtguide.com/guides/nemt-insurance-requirements/) shows. Ask whether the RRG has a rating at all, and what it is.

None of these say "no RRGs" in so many words. The safe move is a yes in writing from each broker, plan, and agency before you bind the policy.

## How to check an RRG quote

Say you run eight wheelchair vans, your broker contract asks for a $1 million [combined single limit](https://nemtguide.com/glossary/combined-single-limit/) on auto liability, and at renewal your agent brings two quotes. One is from a licensed insurer. The other is from an RRG and costs less. Before you choose:

1. **Confirm what it is.** Look for "Risk Retention Group" or "RRG" in the insurer's name and the guaranty fund notice in the sample policy.
2. **Check its registration in your state.** Your state insurance department can tell you whether the group is registered there, and some post a list. Rhode Island's, dated October 2, 2026, names 104. The NAIC lists each state's department.
3. **Ask for its home state and financials.** Ask the agent which state chartered the group, for its latest annual financial statement, and for its A.M. Best rating if it has one.
4. **Get each contract's answer in writing.** Send the quote to every broker, health plan, and licensing office that checks your insurer, and keep their replies.
5. **Price what it cannot cover.** Add the physical damage and workers' comp quotes from other insurers before you compare totals.
6. **Decide on the guaranty gap.** Weigh the saving against the chance that a claim goes unpaid if the group fails.

If licensed insurers have already turned you down, [NEMT insurance denied](https://nemtguide.com/guides/nemt-insurance-denied/) covers the other routes to coverage.

## Frequently asked questions

### Is a risk retention group the same as surplus lines insurance?

No. A surplus lines insurer is not licensed in your state but is allowed to cover risks licensed insurers turn down. An RRG is licensed in its home state, owned by its policyholders, limited to liability coverage, and registered in the other states where it sells. Neither is backed by the Texas guaranty association, according to the Texas Department of Insurance (guide updated January 20, 2021).

### Can a risk retention group sell workers' comp to my NEMT company?

No. Federal law limits an RRG to liability insurance, and the law's definition of liability leaves out an employer's liability to its own employees, except under the railroad workers' law (15 U.S.C. 3901). Buy workers' comp from another insurer, even if your auto and general liability come from an RRG.

### What happens if my risk retention group goes broke?

No state guaranty fund pays its claims. Federal law bars RRGs from joining state insolvency guaranty associations, and states may require every RRG policy to say so. In Texas, policyholders of a licensed insurer that fails are protected up to $300,000 per claim by the state's guaranty association, and RRG policyholders are not (TDI guide updated January 20, 2021).

### How can I tell if an insurance quote comes from a risk retention group?

Read the insurer's name. Federal law says an RRG's name must include the phrase "Risk Retention Group," and some groups on Rhode Island's October 2026 registration list use the short form "A RRG," so look for either. The policy may also carry the federal notice that state insurance insolvency guaranty funds are not available. If you are unsure, ask your agent, and ask your state insurance department whether the group is registered there.

### What is a risk purchasing group?

A group of businesses in similar lines of work that buys liability insurance together for its members. Unlike an RRG, it is not an insurer. In Texas, members of a purchasing group that buys from a licensed insurer may be protected by the state's guaranty association if that insurer has capital and surplus of $25 million or more, and the group must tell members if they are not.

## Official resources

- [NAIC: State insurance departments](https://content.naic.org/state-insurance-departments)
- [NAIC: Risk retention groups](https://content.naic.org/insurance-topics/risk-retention-groups)
- [Texas Department of Insurance: Commercial general liability insurance guide](https://www.tdi.texas.gov/pubs/pc/pcgenliab.html)