New Insurance Company Offers Lower Insurance for ARSA Members
The Aviation Alliance Insurance Risk Retention Group (AAIRRG), developed by the Alexandria, Virginia-based Aeronautical Repair Station Association (ARSA) and Polaris Enterprise Group, received its certificate of authority (insurance license) this week from the state of Montana. AAIRRG will provide product-liability insurance exclusively to repair stations that are ARSA members.
Historically, repair stations, a small subset of the aviation insurance market, have been lumped by insurance providers with more high-risk segments of the aviation industry. This has led to higher premiums for repair stations than if their accident risk had been based solely on their own segment’s collective accident and safety record and not that of the entire aviation industry. Because AAIRRG provides insurance only to repair stations, it will be able to offer coverage at well below market rates, according to AAIRRG.
“AAIRRG offers the chance for a repair station to take greater control of its insurance costs,” said Bill Perdue, AAIRRG president. “For the first time, repair stations will have insurance designed specifically for them that takes into account our industry’s outstanding safety record.”
As a risk-retention group, AAIRRG differs from an ordinary insurance company in that it functions. A risk-retention group consists of independent companies that assemble to create and fund a licensed captive insurance company, which operates under the Federal Liability Risk Retention Act of 1981 and is able to write common commercial liability insurance for its members. Each insured member is an owner of the risk-retention group, receives shares in it and is eligible for financial distributions from potential underwriting profits.