We often receive questions about our Risk Purchasing Groups at New Empire Group. What are they? How do they work? Why are they beneficial? Hopefully this blog will give your clients a general understanding of Risk Purchasing Groups. While New Empire Group manages multiple Risk Purchasing Groups, most of our questions relate to our Umbrella Program RPG’s.

Here are a few of the most common questions we come across…

Q: What is a risk purchasing group, and how does it differ from a risk retention group? A: Under the Liability Risk Retention Act of 1986, a Risk Purchasing Group (also known as RPG) is any group of similar businesses who share common risk characteristics and who join together to purchase liability insurance from an insurance company. A ‘Risk Retention Group’ (also known as a RRG) is a liability insurance company that is owned by its members.

Q: Is a Risk Purchasing Group an insurance company? A: No, a Risk Purchasing Group is not an insurance company; it is a group of like businesses that buy insurance as a group from an insurance company. Purchasing insurance this way often results in a lower cost.

Q: How do we know your purchasing group is permitted in our client’s state(s)? A: While RPG’s are federally authorized (Risk Retention Act of 1986) most states require that groups are registered in the state if they do business there. Our groups are registered in all 50 States. Our compliance department maintains current information about risk purchasing group filing requirements and handles all necessary paperwork on behalf of our groups.

Q: Do participants in the umbrella program share the program’s aggregate limit? A: No. Each certificate in New Empire Group’s Umbrella RPG’s has its own aggregate limit. The aggregate limit is not shared between certificates for our Umbrella programs. Other RPG’s may differ.

Q: If one member of the risk purchasing group fails to pay its premium, will the policy be cancelled? A: Certificates are individually billed and have no bearing on the billing and payment of the other certificates. Non-payment of premium will result in the individual insured’s coverage being cancelled, not the entire group’s.

Q: Could a large claim made by another insured lead to cancellation of my client’s coverage? A: No, an individual claim by another certificate holder will not impact your client during their current coverage term.

Q: Who are the insurance companies used for NEG’s umbrella RPG’s ? A: Federal Insurance Company (Chubb Insurance Group), National Union Fire Insurance Company of Pittsburgh, PA (AIG), Commerce & Industry Insurance Company (AIG) and Ohio Casualty Insurance Company, which are all A.M. Best A+ rated.

Q: How long will it take to get a quote? A: We do our very best to accommodate any urgent need but in general, depending on the size and completeness of the submission, we can typically turn around a quote request in 24 hours.

Q: If my client joins, are they locked into the RPG program? A: RPG membership is annual.  It may be discontinued at any time.

Q: Does completion of the application guarantee acceptance in the program? A: No. All applications are carefully reviewed by our Underwriting Team and certain underwriting criteria must be met in order to qualify for the membership and coverage.

Q: Are there any other costs in addition to the premium? A: There are no additional insurance costs other than the premiums and individual state premium taxes. However, membership in the RPG is required and the annual membership fee is billed with the premium.

Q: Is there a common date for all members? A: Our umbrella programs do not have a common expiration date.  Typically and preferably umbrella policy terms are written in conjunction with the underlying policy terms. Again, other RPG’s and programs may differ.

Q: How do I join the RPG? A: Our application serves as both a membership application and an insurance application.We also require a producer agreement, a copy of the agency license and the agency E&O DEC page for agents binding business with us.

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