How does a RRG differ from a captive?
A. Several states, including Nevada, have passed their own captive insurance laws in order to create an attractive “domicile” for homogenous groups wishing to start their own RRG. Obviously, being the domiciled state is a revenue producing venture for these captive states. The word “captive” is a general term and usually refers to “self-insuring” in some manner and under the heading of “captive” we find such structures as: single parent or pure captives, group captives, RRGs, self insurance funds or trusts, off-shore captives, rent-a-captives and other alternative insurance mechanisms. A RRG may be formed as a captive or as a traditional insurance company but in all cases must be domiciled in a U.S. state and therefore must be an onshore entity. Once licensed by a single state, a RRG is permitted to write business on a direct basis in all fifty states (and the District of Columbia) whereas other forms of captives are not able to operate on a nationwide basis without the use of a fronti
