Risk Retention Reporter
Breaking Story

GAO Report on RRGs Released

On January 9, 2012, the Government Accountability Office (GAO) released its long-anticipated report on RRGs and regulation by non-domiciliary states. The report recognizes that there is a problem. The Liability Risk Retention Act (LRRA) is vague one several key points, which allows for broad interpretations by regulators, courts, and RRGs. The report recommends that Congress consider amending the LRRA to clarify these key points.

The key issues are the types of liability coverage a RRG is allowed to provide and whether or not a non-domiciling state can charge fees to registered RRGs. The report recognized that there is no agreement on these topics even by RRG managers, regulators, or among different courts. By recommending that Congress take action by clarifying the LRRA, the GAO claims that much of the conflict between states and RRGs could be resolved.

For the full report, visit the GAO website: http://www.gao.gov/products/GAO-12-16