Who primarily owns Risk Retention Groups (RRG)?

Risk Retention Groups (RRG) are typically owned and controlled by their policyholders. This unique structure allows members who share similar risks to come together to form a collective group that self-insures against those risks. The primary goal of an RRG is to provide an alternative to traditional insurance markets, enabling the members to have greater input and control over their risk management strategies and the coverage they receive.

In this arrangement, the policyholders, who are also the owners, directly influence the operational decisions of the RRG, including how premiums are set, how claims are managed, and overall governance. This structure not only fosters a sense of shared responsibility among members but also can lead to more favorable underwriting terms, as the collective risk can be better understood and managed by those who are directly involved.

The other options present entities that do not have ownership in the context of RRGs. Insurance company shareholders and external investors typically seek profit from traditional insurance models rather than participating in ownership in a member-centric model. State regulatory bodies do play a role in overseeing RRGs, ensuring compliance with relevant laws and regulations, but they do not own these groups.