A ruling by the Georgia Supreme Court in favour of risk retention groups (RRGs) has prevented insurance authorities in the state from circumventing federal regulations.
In a ruling on 7 May, the Georgia Supreme Court affirmed that the Liability Risk Retention Act (LRRA) regulates RRGs, even in the circumstance when the RRG is domiciled in another state, in its decision in Reis et al v OOIDA RRG.
The court’s opinion read, in part, that while Georgia’s direct action statutes may be permissible for traditional insurance carriers, “it is not allowed in the case of a foreign risk retention group by the express act of Congress in the LRRA”.
JLT Insurance Management (JLT IM) captive practice leader, Anne Marie Towle, said JLTIM was pleased that the court’s decision reinforced the LRRA.
She added: “We applaud the National Risk Retention Association for once again providing important legal and historical input to the court.”
“This has been an ongoing debate prompted by some states trying to impose their own insurance regulations on foreign RRGs when the courts have ruled time and again that the LRRA governs them.”
