A SIIA spokesperson told National Underwriter, “The amount we hope to raise for this purpose has not been identified because of the elastic possible future needs beyond the current case in California.”

California recently prohibited an RRG licensed in Montana to operate there and provide insurance against excess liabilities of members' employee benefit plans. A federal judge in California granted temporary relief of the state's order to cease operations, but additional legal proceeding are expected.

SIIA said monies contributed to its legal defense fund will be segregated from the association's general operating budget and earmarked for litigation-related efforts associated with unlawful state regulation of RRGs.

RRGs are liability insurance companies that are owned by their members–engaged in the same industry or profession. The LRRA allows them to operate in any state once they are licensed in one state and preempts further state licensing challenges.

Certain states, however, have prevented RRGs from operating within their jurisdictions in violation of the federal preemption. Some states have been successful in barring RRGs because the groups often lack the resources to sue for enforcement of their federal rights.

SIIA is a national trade association that represents companies involved in the self-insurance/ alternative risk transfer industry. Interested parties may contribute to the legal defense fund at www.siia.org, or by calling 800-851-7789.