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comment on SARRG April 5, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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comment on SARRG
April 5, 2018
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comment on SARRG
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Ken,
    After discussing with my insurance guy who is as trusted in my book as the guy who provides our contracts, ahem... I got this. I thought it should be part of the conversation, especially considering what is said below about how easy it is to be booted from an Risk Retention Group [RRG]...
    Here are my pros / cons of an RRG on the whole:
    PROS:
Access to some expertise the insurance industry may lack in terms of knowing massive amounts about a specific industry.
Each member of the RRG shares an interest in the other participants.
Coverage can be more broad in certain areas.
Pricing stability.
Minimal shareholders.
    CONS:
Minimal oversight. RRG’s don’t have to keep the same reserves to pay claims as an insurance carrier.
Insufficient information. RRG’s have a tendency to accept riskier members.
The RRG may end up with information about your business that may not be insulated from other members – think trade secrets.
    Once you’re in a RRG arrangement, getting regular insurance can become difficult. So, if the RRG kicks you out because of a claim, you’re pretty much uninsurable with a standard carrier since it appears as though you haven’t had any insurance during your time with the RRG.
AP
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Response
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Ken,
    After 14 years in the RRG program, it would be refreshing if ALL the neighborhood insurance (so called pros) agents would either ask the same questions all at one time, or go to our website for many of these answers. Here is my response on behalf of SARRG,
    
Under the PROS: 
*  The insurance industry outside of SARRG has no idea how to properly handle claims when you have an industry approved contract from 
www.alarmcontracts.com in place. The other insurers are best when there is no contract because they just payout like a slot machine and the alarm dealer pays on the growth of the loss run.
*  In an RRG the other members have NO exposure to the other participants (this one is so old it hurts me to keep answering it) see the website.
SARRG has around 900 policy's currently in force, I would not call that minimal.
    
Under the CONS:
*  SARRG is has oversight from all 50 State Insurance Commissioners where SARRG is registered. Reserves on hand is regulated by law and program operations. Regular quarterly filings with all States includes reserves on hand, annual filings includes independent audits and independent actuarial reviews on reserves.
*  The underwriting guidelines for SARRG are stricter than other insurance companies. This coupled with our claims management program deliver 50% lower payments to claimants than the insurance company's that offer alarm G/L E&O programs. Every one's loss information is shared in the insurance industry and SARRG is number one with having the lowest program loss runs. Where do these insurance agents come from? Former door knockers?
*  The Board of Directors and Officers don't review any applications; we are busy enough running our own alarm companies. We are all volunteers and SARRG hires underwriting firms that are APPROVED by Lloyd's of London to evaluate, rate and issue policies. Conspiracy theories, what will be next?
*  Once being in an RRG arrangement is not a hindrance to getting "regular" insurance. BTW, WTF is "regular" insurance? WE had many members leave the RRG when they needed "A Rated paper", none of them ever had any problems and when we did have an "A Rated paper" product, many of them came back.
    As for getting kicked out of the RRG, the other insurance carriers and agents should be asking why, because the answer is simple, THEY ARE HIGHER RISKS and that is why you are uninsurable.
    Finally, as I stated in prior emails, SARRG is winding down and writing all renews into our SARPG (Security America Risk Purchasing Group). All policies once renewed will be "A" Rated and on Lloyd's of London paper. So all the agents out there that make up all this stuff to try and protect their higher commissions (because that what it is all about) will have nothing to say. I assume that Lloyd's has at least the financial rating from A.M. Best as the traditional insurance carriers that don't know the difference between an alarm defense case and a car accident case.
    Highest rating + best claims management + best underwriting = SARPG
    Our underwriters also place workman's comp, auto and other coverage's as well.  But we do know the difference between an alarm defense case and other types of claims.
    If your readers cross the street for less expensive gas between two stations, then they are foolish not to get a second quote at renewal time. 
Call Crystal or Rhett at 866-315-3838 or visit our website www.securityamericarrg.com.
Bart A. Didden, Executive Claims Manager 
Security America Risk Retention Group - SARRG 
Security America Risk Purchasing Group LLC - SARPG 
877-872-1266 
bdidden@securityamericarrg.com 
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com