What is a Risk Retention Group (RRG)?
RRGs are special liability insurance companies authorized by Federal legislation to write liability insurance exclusively for their owners / policyholders. In the 1980s liability insurance for commercial lines coverage had been “drying up” with insurance companies either no longer issuing such policies or charging enormously high premiums for only modest coverage limits.
Therefore, Congress enacted legislation which allowed groups with similar risk exposures to establish their own insurance companies called “RRGs”. The Federal law provided that RRGs could only be regulated by one state, being the state in which the new RRG was incorporated. Traditional insurers are not only regulated by their “home” state, but also by the insurance regulators of every other state where their policyholders are located. So, this one-state Federal scheme made commercial liability insurance company operation much easier at that critical time.
Several states and jurisdictions– Vermont, Hawaii, Washington, D.C., etc. – encourage and welcomed the formation of RRGs. In 2008, Caring Companies chose Washington, D.C. to be its domicile.
Do all Members of Caring Communities have ownership?
Yes, Members are Owners, having a vote in the matters facing the company. Caring Communities does not admit organizations as non-owner policyholders or Members.
Are RRGs the same as Risk Purchasing Groups (RPGs)?
No. RRGs are licensed insurance companies that issue liability coverage to their owners / policyholders. RPGs are not insurance companies but simply a collection of organizations that purchase liability insurance from non-owned commercial carriers.
Caring Communities (CCrRRG) is a "reciprocal" RRG. What is a reciprocal?
Whereas RRGs got their start approximately 25 years ago, reciprocal insurers began more than 85 years ago. Some of today’s largest carriers were established as reciprocals and still operate as such today. Examples are USAA, Farmers Group and The Erie Insurance Exchange, each ranking within the nation’s top 20 largest carriers.
Reciprocals, sometimes called inter-insurance exchanges, are therefore not at all unusual. Technically, they are unincorporated associations whose members (called subscribers) “exchange” contracts of insurance through a designated attorney-in-fact. CCrRRG’s attorney-in-fact is Caring Communities Shared Services, Ltd., a wholly-owned subsidiary. CCrRRG is guided by its Board of Directors. CCrRRG’s Board members, as well as the Chairs of each operating committee, are CEOs and other senior managers from our policyholder base; all Company governance is directly in the hands of our members.
Has A.M. Best rated the financial strength of CCrRRG?
Yes, CCrRRG (domiciled in Washington, D.C.) and its subsidiary Caring Communities Insurance Company (domiciled in the Cayman Islands) both have an A Financial Strength Rating from A.M. Best.
What are the benefits of operating as a RRG?
The major benefits are that the Members collectively own their own results, have greater control over how their claims are managed, and, in concert with other Members, design and develop risk management initiatives specifically targeting the type of exposures of the Members.
This membership control, in addition to having stabilized insurance rates over time, has been shown to have lowered the portfolio’s frequency of loss, reduced the average severity of each claim and lowered CCrRRG’s overall loss cost. The resulting profits have been used to increase the Company’s financial strength and to pay dividends to Members.
Please ask about our “Special Report”. It describes our Members’ claim experience before they joined Caring Communities and then after they joined. The Special Report shows significantly lower losses in the “after” picture.
How much has Caring Communities paid its Members in the form of policyholder dividends?
Between 2006-2021, CCrRRG Members have received cash policyholder dividends totaling over $70 million. Members with the best experience receive the largest share of policyholder dividends.
Are all Members of Caring Communities not-for-profit entities?
Yes, all Members are not-for-profit. They provide housing and services to seniors, many operating Continuing Care Retirement Communities (CCRCs), Life Plan Communities, or provide housing and continuing care through other models.
Is a Member (or subscriber) financially responsibility for other Members' claims?
No. Unlike typical trusts or other alternative insurance arrangements, the Members of Caring Communities are not liable for the claims of other Members. CCrRRG is not an assessable entity. A Member’s maximum financial responsibility is limited to its capital contribution plus its premium.
Is there a membership fee or investment to join Caring Communities?
Yes. As owners, all Members are responsible for making a one time capital contribution which in some cases may be paid over a span of years.
Do owners share in the profits of Caring Communities?
Yes, every dollar of profit is distributed back to participating Members in the form of policyholder dividends and/or credits to their individual Member accounts within Caring Communities.
What special services do Members obtain through membership?
For over 20 years, our Members have led the industry in best practices for aging services risk management. By joining over 100 not-for-profit, senior care organizations, Members not only have access to specialized risk management tools, education, and training but also have the opportunity to work together on safety projects specially geared towards the unique risks found in senior care.
Inspired, dedicated people working together and sharing knowledge can create positive impact. This camaraderie is what makes Caring Communities special. Learn more about Caring Communities’ Risk Management Solutions.
Is membership to Caring Communities mass marketed through insurance agents, brokers or industry associations?
No. Unlike a typical insurance company, Caring Communities selects only new Members who are highly regarded by their peers within the senior care industry.