WHO WE ARE

    Six years ago,  rapid  increases in malpractice premiums and  the diminishing availability of malpractice insurers in Virginia forced our group practice to look for alternatives to traditional insurance. At that time, premiums were  rising 15 percent to 20 percent each  year and  the number of insurance companies offering  insurance was shrinking.

   Each year, as our renewal date approached, we scrambled to Vnd the best insurance bargain, often making a decision within days  of the policy’s expiration. Frustrated by this costly  and  time-consuming annual process, we formed a group of more than  40 “high risk specialists,” primarily  orthopaedic surgeons and  gynecologists. Combined, we had more than  400 years of experience, had paid  nearly $40 million in premiums, and  had less  than  $350,000 in claims  against us.

We started by forming a captive insurance company, but recently made the transition to a risk retention group (RRG). An RRG is an insurance company formed by insurance buyers who share similar liability exposure.

   In the past few years nearly one-half of new RRGs have been medically oriented. Some have been formed by hospitals on behalf of their medical staUs and  others by independent groups of physicians.

RRGs were  made possible by passage of the Federal Liability Risk Retention Act (LRRA) in 1986. This bill served to increase the availability of commercial liability insurance by preempting most state insurance regulations. RRGs are federally regulated and  are exempt from nearly all state regulatory requirements