State-By-State Survey of Risk Retention Group Regulation
The 1986 Risk Retention Act preempts state law in certain areas while authorizing states to regulate in others. In some cases, there is ambiguity as to where state regulation is preempted, and federal law prevails. The result is that states have adopted various positions on certain key issues that impact Risk Retention Act users. This state-by-state survey focuses on the following regulatory issues impacting non-domiciliary risk retention groups.
Does the state require RRGs to use state registration forms, or will the state accept NAIC uniform registration forms?Does the state charge RRGs registration fees for foreign RRGs?
Does the state tax RRG premium at the admitted carrier rate or the surplus lines rate? Is a domiciled RRG taxed differently from a foreign RRG?
State-by-state responses to the survey are tabulated on the following pages. These responses are discussed below.
Registration Forms for RRGs
The 1986 Risk Retention Act requires that RRGs and PGs notify state insurance commissioners of their intent to do business in the state. In response to complaints from many RRGs and PGs regarding the lack of uniformity among the various states and the burdens created by having to comply with the varying forms of 51 different states, the NAIC Risk Retention Working Group developed uniform registration forms which were adopted at the December 1989 NAIC meeting, subsequently revised and readopted at the June 1991 NAIC meeting. The forms were once again updated in 2020 due to the work of NAIC RRG Task Force. While the NAIC cannot mandate use of the forms, it has encouraged states to use them.
This year’s survey determined that for non-domiciled RRGs 28 states will accept the NAIC uniform registration forms for RRGs; 23 states require use of their own state form; and three states require both the NAIC and their own state form for RRG registration. Of the 28 states that accept the NAIC form for RRG filings, 14 will also accept their own state form.
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