American Outdoors Risk Retention Group, Inc. (“AORRG”)
Founding Organization: One of the oldest snowmobiling organizations in the U.S., the Vermont Association of Snow Travelers (VAST) was founded over 50 years ago with a goal of organizing the sport of snowmobiling in the state of Vermont. VAST is a private, non-profit organization comprised of 120 clubs statewide, with over 22,000 members. Supported by steadfast volunteers, our clubs are responsible for maintaining and grooming over 4,200 miles of trails across the properties of thousands of landowners throughout the state. The commitment of our many volunteers and the generosity of our landowners are the backbone of the organization.
The Recreation Industry
According to the U.S. Department of Commerce’s Bureau of Economic Analysis (“BEA”), “U.S. data show that the outdoor recreation economy accounted for 1.8% ($374 billion) of current-dollar gross domestic product (“GDP”) for the nation in 2020. Outdoor recreational activities include but aren’t limited to boating & canoeing & fishing, bicycling, hiking & camping, RVing, hunting & shooting & trapping, motorcycling & ATVing, equestrian, skiing & snowboarding & snowmobiling, rock climbing, etc. There have been very few commercial insurance companies willing to provide coverage, despite their favorable claims history as an industry.
After years of drastically increasing premium rates and a dwindling number of providers in the market, VAST began investigating alternatives to traditional insurance policies in 2018. VAST’s research led to the conclusion that a Risk Retention Group would be the best alternative and American Outdoors Risk Retention Group was formed in 2021. VAST has since invested significant resources to get AORRG licensed in early 2022.
What is Captive Insurance and what is a Risk Retention Group (RRG)?
A captive insurance company is a wholly owned subsidiary insurer that provides risk-mitigation services for its parent company or a group of related companies. There are over 10,000 captive insurance companies in the world, underwriting some of the insurance risks of their parents/owners, subsidiaries or customers. Over 90% of Fortune 500 companies use captives. Vermont is the largest US domicile for captives.
A Risk Retention Group (“RRG”) is a type of captive insurance company. Organized pursuant to the Federal Liability Risk Retention Act of 1986 (“LRRA”), an RRG is licensed and subject to regulation in the state where it is domiciled. An RRG may register and do business in other states without being subject to all of the nondomiciliary state’s insurance laws and regulations. As of early 2022, there are 239 RRGs in the country, with a combined annual premium close to $4 billion. Vermont is the largest RRG domicile in the US.
Benefits and Highlights of AORRG Membership
In the future, VAST may decide to offer membership to other outdoor recreation associations. If we do, here is some information to know:
1. Eligibility & Ownership
Any association and their affiliated clubs engaged in recreational activities in the U.S. are eligible to apply for insurance coverage. As in any RRG, every insured is an owner and every owner is an insured.
2. Insurance Lines & Limits
Currently, AORRG insures General Liability and Directors and Officers for up to $1,000,000 per occurrence with a $2,000,000 aggregate. AORRG plans to increase its product lines and limits in the future, subject to regulatory approval.
3. Costs
All owners/insureds are required to make a capital contribution starting at $1,000 per. The exact contribution amount is linked to each insured’s risk profile and size though.
Premiums are actuarially assessed.
4. Benefits
· Customized insurance policy form
· Self-governance: policy holders are owners
· Consistent premium pricing based on conservative risk selection
· Profits belong to owners/insureds
· Expert management and risk prevention services
· Lower administrative costs: no need to pay commercial insurance companies’ shareholders
· Defense attorneys who understand your risks
5. Territory
AORRG is in the process of being registered in all the other 49 states. Upon completion, AORRG can insure eligible associations and clubs in all 50 states and the District of Columbia.
Contact Info
Cindy Locke, VAST Executive Director at 802-229-0005 ext. 111
