Recognizing a crisis in the liability insurance market, Congress passed the Liability Risk Retention Act (LRRA) in 1986, allowing similar institutions or businesses to form a group to share and retain liability risks, hence the name, Risk Retention Group (RRG).
United Educators was one of the first and is one of the largest RRGs formed since Congress enacted this legislation. RRGs are a form of a captive insurance company, formed to meet the unique risk transfer need of a specific type of organization or business. Flexibility, responsiveness, and focus on the members of the group are the hallmarks of a well-run RRG.
Unlike traditional commercial insurance companies, which are regulated in each state in which they do business, RRGs are licensed in one state and can serve members in all states. RRGs are expected to be experts in their specific market and to price insurance policies accurately. Because of the shared ownership and expertise, they have a strong and vested interest in the long-term success of the RRG. Consequently, RRG policy holders do not have access to state guaranty funds.
United Educators’ form of ownership is a reciprocal. This structure allows United Educators to segregate and separately account for each individual member’s capital investment in United Educators. As a reciprocal, United Educators is a for-profit association owned and governed by 1,200 independent schools, public school districts, public school pools, colleges, universities, and education associations. United Educators is a non-assessable entity.