What is an RRG?
Risk Retention Groups were enabled by the Federal Liability Risk Retention Act of 1981, amended in 1986, to help business and professional organizations obtain liability insurance that had become unavailable or unaffordable due to the lawsuit crisis. The Act provided for creation of liability insurance companies owned by their members and known as Risk Retention Groups. An RRG domiciled in one state is allowed to operate in any other state without additional licensing.The Uni-Ter Group established the first RRG to provide General/Professional Liability Insurance to long-term care facilities and is the leader in the field.
How does an RRG work?
Risk Retention Groups are insurance companies, similar to mutual companies in that they are owned by their policy holders. Two RRGs managed by Uni-Ter, Ponce de Leon LTC RRG, Inc. in Florida, and Lewis & Clark LTC RRG, Inc. in 35 other states, provide General/Professional Liability Insurance to Skilled Nursing, Assisted Living, Continuing Care Retirement Communities, and related facilities. Independent Agents work with their long-term care facility clients to qualify them for membership in Ponce de Leon or Lewis & Clark. Facilities that meet the RRG standards purchase stock in the RRG, which provides them with access to stable, competitively priced liability insurance that is not subject to the vagaries of the traditional market.
What kinds of insurance can RRGs provide?
Risk Retention Groups are restricted by law to writing liability insurance.
Why are RRGs important to the long-term care industry?
Long-term care owner/operators must have General and Professional Liability Insurance to protect them against lawsuits that without insurance could wipe them out. In recent years, many states have experienced a lawsuit crisis that caused traditional insurers to withdraw from the state, raise premiums to unaffordable levels, and establish prohibitively restrictive terms/conditions. Participation in a well-managed Risk Retention Group enables owner/operators to control their own destiny. They own the Company. They establish Risk Management protocols that keep loss ratios down and aggressive claims handling that causes trial lawyers to look elsewhere for targets.
What should an agent look for in a Risk Retention Group?
Before recommending an RRG to a client, the agent should check the financials of the RRG. Since Uni-Ter worked with the State of Florida and Florida long-term care facility owners to establish the first RRG in the industry, 35 have cropped up across the country. Only four have achieved a Financial Stability Rating of “A Exceptional” from Demotech, the nationally recognized rating agency. Two of the four, Ponce de Leon and Lewis & Clark, are managed by Uni-Ter. Other essential factors to consider include: loss ratio, risk management programs, and claims handling track record.
What are the special features that make RRGs appealing to agents and their clients?
Availability of coverage year in /year out vs. the constant uncertainty of dealing with the traditional market… Coverage tailored to your clients’ specific needs… Potential for profit as shareholders when company grows… Improved cash flow… Professional Risk Management to prevent losses… Aggressive claims handling… Direct access to reinsurance markets… Voice in management.
What’s special about RRGs operated by Uni-Ter?
The outstanding success of RRGs managed by Uni-Ter -- loss ratios under 40 per cent -- results in large part from the fact that Ponce de Leon and Lewis & Clark require adherence to professional Risk Management protocols and provide their members with aggressive claims handling. Ponce and Lewis & Clark are the only long-term care RRGs in the U.S. that provide underwriting, risk management, and claims handling under one roof. The Uni-Ter Group, as a Third Party Administrator, provides all the services of an insurance company to its RRGs through a staff of leading insurance professionals who have been in the business for many years. This allows the Board of Directors to concentrate on oversight and policy matters.
What kind of facilities should consider joining Ponce de Leon or Lewis & Clark?
Operators committed to quality with well-run facilities, loss ratios under 50 percent for five years, an understanding of risk taking, committed to risk management, good balance sheets, and a minimum of 40 beds.
What does an owner/operator need to qualify?
Five years’ loss runs valued within 90 days… current state license… resumes of key staff… latest state survey, plan of corrections, compliance form, and fire inspection report… most recent financial statements… related information available from Uni-Ter underwriters and/or marketing division.
How can I get involved?
If you have clients in the long-term care industry, we’ll be glad to work with you to explain to them the benefits of becoming a shareholder in Ponce de Leon LTC RRG, Inc. or Lewis & Clark LTC RRG, Inc. Call Sandy Elsass, President/CEO (212-954-9355 selsass@usre.com) or Nadeene Wood-Clater, Senior Vice President-Marketing (678-781-2435 nwoodclater@uni-ter.com).