The industry must work together to police bad actor risk retention groups (RRGs) or the National Association of Insurance Commissioners (NAIC) might look to alter the way they operate, according to Dana Sheppard, associate commissioner, Risk Finance Bureau at District of Columbia (DC) Department of Insurance, Securities and Banking.
Speaking in the ‘regulatory hot topics’ session at the Captive Insurance Companies Association (CICA) 2019 conference, Sheppard suggested that industry collaboration was necessary.
He said: “It is important that we all work together to keep an eye on some of these bad actors.”
“The NAIC has been pretty quiet lately but bad actors would open the door for the NAIC to revive their working group or a task force and before you know it they are looking at changing the ways RRGs operate.
He added: “They’ve even looked into non-RRG captives in the not too distant past.”
“Anything is fair game for the NAIC if we don’t do a good job of policing RRGs properly. It is important.”