There's a growing trend among risk retention groups providing professional liability coverage in the health care sector to require adherence to risk management and loss prevention programs as a condition for RRG membership.

While RRGs formed in other business areas also focus on risk management and loss prevention, the requirement in the health care sector–including physicians, hospitals and nursing homes–is of particular interest, since more than 60 percent of RRGs have formed in this business area since 2002.

Enabled by passage of the 1986 Liability Risk Retention Act, RRGs are insurance companies owned by their policyholders. RRG insureds, as owners of the entity, typically provide a capital contribution in addition to paying premium for the liability insurance coverage.

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