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ABIC, RRG was created in accordance to the Liability Risk Retention Act (LRRA) Act of 1986. In passing this Liability Risk Retention Act, Congress created an alternative solution to liability issues at that time, which included a lack of product availability and excessive rates. This Act allows groups of similar liability exposures to own and obtain coverage from an insurer formed as a Risk Retention Group (RRG). A RRG is a liability insurance company, owned by its members, and in our case, through the American Builders Association.
Effectively, American Builders Association members pay ABIC premiums for their specific liability exposure that fund the reserves to pay potential claims and re-occurring program administration fees. The advantages of such a program include; unbundled services, stable pricing, broader coverage and reporting forms, and member influence over risk management to name a few. Potential disadvantages may include that the RRG isn't allowed to issue policies outside the "associations" core business foundation, and it only offers liability insurance.