Ms. Abraham's statement explained “the role of RRGs and how RRGs could assist in providing coverage for niche markets in the event that Congress saw fit to expand the LRRA to include property and commercial auto.

NRRA counsel Robert H. Myers Jr., managing partner in the Washington, D.C. office of Morris, Manning & Martin, LLP said “As counsel for NRRA, I'd say this is an excellent first step to broach the issue with Congress and generate some interest in pushing this forward,” he said.

However, Mr. Myers noted that United Educators (UE) was not called as a witness and was not able to personally present the testimony at the hearing which dealt with problems in the catastrophe insurance marketplace.

Expansion of the LRRA is a bipartisan effort and is supported by “a wide range of consumer groups, insurance brokers, state insurance commissioners, real estate investment trusts (REITs), and RRGs representing public housing authorities, educational institutions and businesses,” according to Ms. Abraham's submission.

The paper explained that the “genius of Congress' enactment of the Liability Risk Retention Act is vividly demonstrated by the successes of United Educators and other Risk Retention Groups, including the Housing Authority Risk Retention Group, ALPS and Nonprofit's Insurance Alliance of California.

“They have succeeded because Congress recognized that commercial insurance purchasers know better than anyone else their own risks and needs.”

Expansion of the Liability Risk Retention Act to include property and fleet auto insurance would create additional capacity to deal with natural catastrophes, according to Ms. Abraham's statement.

She said that RRGs will not solve all the problems in the U.S. property insurance market because the RRG “is not a solution for homeowners and will not instantaneously provide coverage for all coastal institutions.”

Ms. Abraham said that her group, United Educators Insurance, serves schools, colleges, universities, and related educational associations and groups.

The first coverage offered by UE was Excess Liability, “which offered the higher limits that were no longer available in the regular insurance market,” she said.

Ms. Abraham explained that a standard liability package through UE covers risks often unavailable through other insurers, that “are basic to educational institutions, such as sexual harassment, sexual molestation, international study and sports injuries.”

According to the testimony, “The conditions faced by some parts of the education community in obtaining stable property insurance resembles closely those from the liability market of the 1980s.”

Having successfully addressed the hazards of a hard liability market, if given the opportunity, risk retention groups “can be counted on to find the best path to confronting the same conditions in much needed property markets of 2007 and beyond,” the testimony concluded.