Florida Legislative Session Ends without Passage of RRG Bill

Florida lawmakers have concluded their legislative session without giving final approval to a bill that the National Risk Retention Association (NRRA) said would have discriminated against risk retention groups (RRGs) writing commercial auto coverage in the state.

Under the bill, SB 516, RRGs writing that coverage in the state would have been required to possess at least an A.M. Best "A" rating. In addition, such RRGs would have been required to have a minimum Best financial status category of "VIII," meaning $100 million to $250 million in capital surplus, in order to conduct business in Florida.

"SB 516 would have had a serious negative effect on virtually all of the risk retention groups currently writing commercial auto in Florida and their Florida policyholders and would have certainly had a direct and damaging impact for the Florida commercial auto insurance market as a whole," said Joe Deems, executive director of the National Risk Retention Association.

Mr. Deems, in an earlier statement, also suggested that the Florida measure would have violated the federal Liability Risk Retention Act of 1986, which enabled the formation of RRGs.