A team led by the Aeronautical Repair Station Association (ARSA) is forming a company that will offer liability insurance to repair stations.
About 20 member companies have committed to be founders of the Aviation Alliance Insurance Risk Retention Group (AAIRRG).
The group’s goal is to secure enough commitments to incorporate in the second half of 2006. Participation in the AAIRRG will be reserved for ARSA members.
AAIRRG will not be an ordinary insurance company, but rather a risk retention group (RRG). An RRG is a group of independent companies that band together to create and fund a licensed captive insurance company.
Members will pay an up-front capitalization fee as well as a regular premium. The capitalization fee, projected to be about 30% of the members’ current annual insurance premium, will help fund the RRG. Each member will get shares in the RRG.