Foreign Risk Retention Group Registration

 The Office of Financial and Insurance Regulation issues

A. NAME OF PERMIT OR APPROVAL:

Foreign Risk Retention Group Registration

B. STATUTORY AUTHORITY:

The Insurance Code of 1956 - Chapter 18

The Insurance Code of 1956 - Chapter 19

C. APPLICABLE REGULATION:

PA 218 of 1956 The Insurance Code of 1956

D. SUMMARY OF PERMIT/APPROVAL PROCESS:

 1.  Applicability (activities that require the permit)

A Risk Retention Group is a corporation or other limited liability association that is chartered in a state and its owners are the only persons who comprise the membership of the risk retention group and are provided insurance by the group. The Risk Retention Group does not exclude a person from membership solely to provide members of the group with a competitive advantage over that person. Its members are engaged in businesses or activities similar or related with respect to the liability of which the members are exposed by virtue of a related, similar, or common business, trade, product service premises, or operation. The name of the group shall include the phrase, "risk retention group". A Foreign Risk Retention Group must comply with Chapters 18 and 20 of the Michigan Insurance Code.

 2.  Pre-Application Requirements

The producer (agent/agency) placing business for the foreign risk retention group must be licensed for surplus lines.

 3.  Application Submission Requirements

• Complete and submit form FIS 0233 Application for Foreign Risk Retention Group License
• Complete and submit form FIS 0234 Consent to Service
• Submit a $25.00 processing fee with form, FIS 0235 Foreign Risk Retention Group Registration Fee Card
• Submit form FIS 0364 PG Report of Operation
• Submit copy of Articles of Incorporation
• Submit copy of license in state of domicile
• Submit the previous 3 years' Financial Statements or Financial Projections
• Submit the Report of Operation or feasibility study which includes the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance that the RRG intends to offer.
• Submit financial statement certified by an independent public accountant that contains a statement of opinion of loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist.
• Submit a copy of the most recent examination and/or audit
• Submit copy of Reinsurance Agreements
• Submit historical and/or expected loss experience
• Any appropriate opinions by a qualified, independent casualty actuary which includes a determination of the minimum premium levels required in order for the RRG to commence operations and prevent hazardous financial conditions.

 4.  Procedures and Time-Frame for Obtaining Permit or Approval

When the items required (see above) have been submitted and are received, the registration is generally processed within 60 - 90 days, unless further clarification is required.

 5.  Operational Requirements

Notice Required on the Insurance Policy

Chartered and Foreign Risk Retention Groups shall include the following notice on an application form for insurance, as well as the front and declaration pages of a policy, in 10-point type:

"NOTICE This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group."

Premium Taxes

A Risk Retention Group that does not have a Certificate of Authority issued by this state is liable for payment of a 2% premium tax on direct business for a risk resident to be submitted quarterly on form FIS 0260 Report of Risk Retention Group Premium and Tax. Premium taxes are paid quarterly within 30 days of the end of the quarter. No declaration sheets are required to be submitted with the FIS 0260 except for credits taken. The Office of Financial and Insurance Services does not issue a refund on any premium taxes previously paid. The Risk Retention Group can take a credit toward the appropriate quarter with submission of proper documentation of any cancellations and returned premiums.

Annual Financial Statement and Fee

The risk retention group is required to file an Annual Financial Statement accompanied by a $25.00 fee during the first quarter of the following calendar year. No reminder or invoice will be mailed.

 6.  Fees

• Application Processing Fee - $25.00
• Annual Financial Statement - $25.00

 7.  Appeal Process

Not applicable for Foreign Risk Retention Group Registration

 8.  Public Input Opportunities

We encourage consumers to first attempt to resolve disputes directly with their financial service entity. If a resolution cannot be reached, our office can try to help resolve a dispute. A complaint form must be completed for for the type of financial service you are having difficulty with.

• Insurance Complaint Form and Guide to Resolving Problems
• Insurance Complaint Form (download to use typewriter feature, requires Acrobat Reader v7.0.9 or higher)
• Insurance Business-to-Business Complaint Guide

E. Contact Information:

Contact Us

Creation/Revision Date:

October 6, 2010