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A Risk Retention Group (RRG) is a special form of captive insurance company authorized under the federal Liability Risk Retention Act (LRRA) of 1986. RRGs may write liability coverage for their member-owners on a nationwide basis after chartering in a single domicile state, without needing a separate license in each state where they write coverage. This makes RRGs a powerful vehicle for industry associations, professional groups, and trade organizations that want to provide liability coverage to their members across all 50 states.

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LRRA — The Federal Framework

The Liability Risk Retention Act preempts most state insurance regulation for qualifying RRGs. Key provisions:
  • An RRG that qualifies and is licensed in one domicile state may write liability coverage in all 50 states and DC.
  • RRGs may only write liability lines — NOT property, workers’ compensation, or life/health.
  • All members must be insureds (no non-member insureds).
  • Members must share a common business, trade, product, services, premises, or operations.
  • The domicile state is the primary regulator. Other states can only require registration, not independent licensing.
:::caution Surplus lines taxes still apply in non-domicile states. An RRG writing GL in California must pay California’s surplus lines tax even though it doesn’t need a California license. OpenInsure’s @openinsure/compliance tax engine handles this calculation automatically. :::

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Domicile Requirements for RRGs

Most RRGs domicile in Vermont, South Carolina, Hawaii, or Delaware. Vermont is the most popular US RRG domicile with specific RRG enabling legislation.

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Vermont RRG Formation Requirements

  • Minimum capital: $500,000 (higher than pure captives)
  • Must demonstrate that all charter members share a common risk
  • Business plan with 5-year actuarial projections
  • Actuarial feasibility study signed by a qualified actuary
  • Application to Vermont DFR with list of charter members
  • NAIC biographical affidavits for all directors and officers

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NAIC Filing Requirements

RRGs file financial statements with the NAIC on a quarterly and annual basis. These filings use the NAIC’s standard financial statement blanks.

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Quarterly Statement (Yellow Book)

Due dates:
  • Q1: May 15
  • Q2: August 15
  • Q3: November 15
  • Annual: March 1
Required schedules:
ScheduleDescription
AssetsStatement of admitted assets, non-admitted assets, and total assets
LiabilitiesLoss reserves, unearned premium reserve, other liabilities
Capital & SurplusChanges in surplus during the period
IncomePremiums earned, losses incurred, expenses
Schedule FAssumed and ceded reinsurance
Schedule PHistorical loss development data
Schedule YInformation of holding company group
Exhibit of Premiums and LossesBy state (RRGs must report by risk state)
OpenInsure generates data for each of these schedules from the policy, claims, and billing databases.

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Annual Statement — Additional Requirements

The annual statement includes all quarterly schedules plus:
  • Management’s Discussion & Analysis — narrative review of financial condition
  • Actuarial Opinion — signed by a qualified actuary
  • Audit Report — by a licensed CPA
  • Notes to Financial Statements
POST /v1/compliance/:orgId/naic-statement
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "period": "2025-Q1",
  "statementType": "QUARTERLY",
  "format": "NAIC_XML"   // or 'PDF' for human-readable
}

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Schedule F — Reinsurance Reporting

Schedule F is the NAIC’s detailed reinsurance schedule. It reports every reinsurance transaction, the reinsurer identity, and whether credit for reinsurance is taken in the financial statements.

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Part 1 — Reinsurance Assumed

Lists all business assumed from other insurers (uncommon for typical RRGs).

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Part 2 — Reinsurance Ceded

Lists all business ceded to reinsurers:
ColumnDescription
Reinsurer NameLegal name of reinsurer
NAIC CodeReinsurer’s NAIC company code
Domicile StateState of domicile
Authorized/UnauthorizedWhether reinsurer is admitted in the domicile state
Ceded PremiumPremium ceded during the period
Ceded Losses PaidLosses recovered from reinsurer
Ceded ReservesEstimated future recoveries
Funds HeldPremiums withheld as security
Letters of CreditLOC posted by reinsurer
OpenInsure generates Schedule F data from the @openinsure/reinsurance treaty records: 
GET /v1/compliance/:orgId/schedule-f?period=2025-annual

# Returns structured JSON conforming to NAIC Schedule F specifications

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Reciprocal State Registration

Although an RRG doesn’t need a full license in non-domicile states, it must register before conducting business there. OpenInsure tracks registration status for every state.

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Registration Process

For each non-domicile state where the RRG plans to write coverage:
  1. File a Notice of Intent to Do Business with the state insurance department (usually a 30-day advance notice).
  2. Submit: certificate of insurance, domicile license, articles of incorporation, most recent annual statement.
  3. Pay state registration fee (varies by state, typically 250–250–1,000).
  4. Comply with state surplus lines tax and stamping office requirements.
GET /v1/compliance/:orgId/state-registrations

# Response:
{
  "domicile": "VT",
  "registrations": [
    { "state": "CA", "status": "active", "registeredDate": "2022-03-15", "expirationDate": null },
    { "state": "NY", "status": "active", "registeredDate": "2022-04-01", "expirationDate": null },
    { "state": "TX", "status": "pending", "filedDate": "2025-06-01", "estimatedApproval": "2025-07-01" },
    { "state": "FL", "status": "not_registered", "firstPolicySold": null }
  ]
}
:::note If an RRG binds a policy in a state where it is not yet registered, OpenInsure generates a COMPLIANCE_VIOLATION alert and blocks the policy from being issued until registration is confirmed. The compliance officer is notified immediately. :::

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Surplus Lines Tax Calculation

In non-domicile states, RRG premiums are subject to surplus lines tax. OpenInsure’s @openinsure/compliance package maintains the current surplus lines tax rate for all 50 states:
StateSL Tax RateSLSF FeeNotes
California3.00%NoneCATAX filing via LASLI
New York3.60%NoneFiling via ELANY
Texas4.85%NoneFiling via TSLA
Florida5.00%NoneFiling via FSLSO
All othersVariesVariesSee compliance engine
Taxes are calculated at bind time and included in the policy fee breakdown. The compliance engine generates monthly surplus lines tax returns for each state where the RRG has written business.

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Annual NAIC Filing Checklist

OpenInsure generates a compliance checklist for RRGs at the start of each calendar year: 
GET /v1/compliance/:orgId/annual-checklist?year=2025

# Returns all required filings with due dates, status, and responsible party
FilingDue DateStatus
Q4 Quarterly StatementMarch 1✅ Filed Feb 14
Annual Actuarial OpinionMarch 1✅ Filed Feb 28
Audited FinancialsJune 1🟡 In progress
Premium Tax Returns (domicile)March 1✅ Filed Feb 14
SL Tax Returns (CA, NY, TX…)Monthly🟡 May return due June 20
State Registration RenewalsVarious🔴 MA renewal due July 15
NAIC Company Profile UpdateAnnual✅ Filed Jan 30