“The genius of Congress in establishing RRGs was that licensing in any state would make them acceptable in all states,” ARRC's Steering Committee chairman, Richard C. Goff, said in a statement. He added that the status of RRGs is threatened by erosion of their federal protection.

Concerns about alteration of the federal risk retention law were heightened last year by the release of the Government Accountability Office RRG Report in September 2005. While many of GAO's recommendations were, in fact, favorable and pointed out the value of RRGs, some states have used aspects of the report as a platform to reign-in RRGs, Mr. Goff said.

Mr. Kinder emphasized that ARRC will work in tandem with other domicile and national captive associations.

In fact, Brian Donovan, chairman of the NRRA, released a conciliatory statement in response. “We are the long-established voice of the risk retention and purchasing group industry, and we are happy to cooperate with any group that advances the interests of our industry in a responsible and knowledgeable manner,” he said.

The statement added that NRRA has “been working for the best interests of the risk retention and purchasing group industry since the amendment of the Product Liability Risk Retention Act in 1986,” and has “a long record of cooperative action with regulators and legislators to advance the interests of the alternative market…”

However, Jon Harkavy, vice president and general counsel with Risk Services, LLC in Arlington, Va., questioned whether formation of another group is the answer. “From a captive manager's point of view, and perhaps from a risk retention group's point of view, there's already association overload,” he said.

“We just put to bed a group called [the Coalition of Alternative Risk Funding Mechanisms] because we could not get the other associations to contribute. It seemed that [the Vermont Captive Insurance Association] was always the focus,” said Mr. Harkavy, a former CARFM president and VCIA board member.

He added that a captive owner already is being “asked to join its state of domicile's association, NRRA and CICA [the Captive Insurance Companies Association]–and now they're asked to join this,” speculating that dues for joining all of these groups could cost $4,000-to-$5,000 annually.

Mr. Harkavy said CARFM is in the process of officially disbanding because “we couldn't get cooperation from other associations,” even though CARFM had a “far more nominal fee structure.”

“What we need,” he concluded, “is more workers, not another association to tell us what we should be doing.”

Mr. Kinder said the new coalition is needed because uniform regulatory processes must be addressed as well as how RRGs can be used to accommodate shortcomings in the insurance market. For example, he said, “with all the natural disasters we've had, is there an area where property exposures may one day soon become a difficult cover to place–especially in coastal areas? Could an RRG, if it had the opportunity to include property coverage, respond to that shortfall?”

Mr. Harkavy emphasized that while he respects Mr. Kinder and Larry Mirel–the former insurance commissioner of Washington, D.C., a growing captive domicile, who now belongs to the law firm of Wiley Rein & Fielding LLP, which is counsel to ARRC–some efforts would be duplicated, such as the cost of lobbying on many of the same issues. “We're far better off using an existing infrastructure than starting a new organization,” he said.