What is the definition of 'risk retention group'?

The definition of a 'risk retention group' is an insurer organized under the Risk Retention Amendments, which allows businesses to pool their resources to provide liability coverage for their members. This type of group is formed by a shared interest among its members, typically in a specific industry or sector, to address their insurance needs in a more economical and controlled manner.

Risk retention groups primarily focus on providing liability insurance and are distinct from traditional insurance companies in that they are owned by their members and aim to operate as mutual insurers. The Risk Retention Amendments were enacted to encourage these groups, providing regulatory benefits that facilitate their formation and operation.

This option accurately captures the legal framework and operational structure of risk retention groups, distinguishing them from other forms of risk-sharing mechanisms or insurance arrangements. Other options may touch upon aspects of risk sharing or non-profit initiatives, but they do not encompass the precise legal definition and structure provided by the Risk Retention Amendments.