The Liability Risk Retention Act contains a single-state regulatory framework that enables risk retention groups to become licensed and regulated under the laws of a domiciliary state, preempting most laws and regulations of nondomiciliary states in which they operate.
The National Association of Insurance Commissioners has never much liked the single-state regulatory scheme, which removes nondomiciliary state control–that is, until the threat of federal regulation prompted a 180-degree turn on the part of some regulators.
Indeed, NAIC's proposal for a single-state regulatory scheme for reinsurers and its call for implementation through congressional action is viewed as a "paradigm shift for the NAIC" by Larry Mirel, the former commissioner at the District of Columbia Department of Insurance, Securities and Banking.
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