Health Care Industry Liability Reciprocal Insurance Company, a Risk Retention Group: An Overview

Health Care Industry Liability Reciprocal Insurance Company
Health Care Industry Liability Reciprocal Insurance Company.PHOTO COURTESY/Instagram

The Health Care Industry Liability Reciprocal Insurance Company, a Risk Retention Group  is a specialized insurance provider that offers coverage to healthcare industry professionals

They operate as a Risk Retention Group (RRG)

In this article, we will explore the concept of RRGs, the benefits and challenges of forming one, and the specific features of HCILRIC.

What is a Risk Retention Group?

A Risk Retention Group  is a type of insurance company that is formed and regulated under the federal Liability Risk Retention Act of 1986

The act allows businesses with similar liability exposures to pool their risks and form their own insurance company

The main purpose of RRGs is to provide affordable and customized liability insurance to their members

What is an Insurance Retention Group?

An Insurance Retention Group  is a broader term that encompasses RRGs and other types of self-insurance arrangements

IRGs are generally formed by businesses or organizations that want to retain some or all of their risks

IRGs can offer lower premiums, tax advantages, underwriting profits, and control over coverage and claims.

What is a Reciprocal Insurance Company?

A Reciprocal Insurance Company is a form of mutual insurance company that is owned and operated by its policyholders

Subscribers agree to share their risks and losses and appoint an attorney-in-fact to manage the RIC on their behalf.

RICs can provide various types of insurance, such as property, casualty, and liability.

What is the Risk Retention Policy?

The Risk Retention Policy is the policy document that outlines the terms and conditions of the insurance coverage provided by an RRG

The policy specifies the coverages, limits, deductibles, exclusions, and endorsements that apply to the policyholders.

The policy also defines the rights and obligations of the policyholders and the RRG or IRG

What are some examples of RRGs in the healthcare industry?

The healthcare industry is one of the most common sectors that use RRGs to insure their liability risks

Some examples of RRGs in the healthcare industry are:

  • Tecumseh Health Reciprocal Risk Retention Group which provides insurance to hospitals and medical centers in Oklahoma and Indiana
  • Pegaso Risk Retention Group, Inc.  which provides insurance to healthcare providers and facilities in Florida
  • ORCA Risk Retention Group, Inc. which provides insurance to healthcare organizations and professionals in Washington

What are the benefits of a captive insurance company?

Captive insurance companies  offer several benefits to their owners, such as:

  • Lower insurance costs, as captives can eliminate or reduce the fees and commissions charged by commercial insurers.
  • Tax advantages, as captives, can deduct their premiums and reserves from their taxable income
  • Underwriting profits, as captives, can retain the surplus from their premiums and investment income
  • Greater control over coverage, as captives, can tailor their policies to suit their specific needs

How are captive insurance companies funded?

Captives can access reinsurance or other forms of risk transfer to protect themselves from large losses.

Captives can choose from different methods of funding, such as:

  • Fully funded, where the captive has sufficient capital and reserves to cover its expected losses and expenses.
  • Partially funded, where the captive relies on reinsurance or other sources of funds to cover part of its losses
  • Unfunded, where the captive does not have any capital or reserves and depends entirely on reinsurance


The Health Care Industry Liability Reciprocal insurance company, a Risk Retention Group is an example of a reciprocal insurance company

HCILRIC is one of the  RRGs and IRGs  in the insurance market, offering alternative and innovative solutions to organizations

RRGs and IRGs can offer various benefits, such as lower costs, tax savings, underwriting profits, and greater control over coverage

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