Marine Trades Association
POB 370, Cocoa, Florida 32923
Dear Marine Professional,
Thank you for considering the Maritime Insurance Company. The proposed MTA Risk Retention Group is designed for your insurance needs by the marine industry.
The MIC will be a US licensed, incorporated and domiciled risk retention group insurance company established to offer business liability insurance, including Protection & Indemnity coverage to all segments of the marine industry in all states. We are a company of your colleagues, and know your industry like you know it.
The reason we are forming an insurance company for our industry stems from the inevitable high and low pricing cycles in the commercial market. Presently the insurance cycle is in a "hard market" or higher priced stage. Rates for our industry are increasing and insurance companies are dropping coverages and clients for perceived "high risks". In some cases, these individuals or firms have been insured for years with no losses. We suspect the industry as a whole pays more in liability premiums than the losses paid by insurers, however even if you have few or zero claims you are equally part of the arbitrary pricing cycles.
The solution to this problem is found in the Liability Risk Retention Act of 1986, a US Federal law, which allows businesses with like risks to join together and insure themselves. In essence, the legislation created the opportunity for individuals or companies in the same industry to form their own insurance company. A Risk Retention Group (RRG) is an insurance company, and as the name implies, the company "retains" only a portion of the risk for each policy it issues. The balance of the risk not retained in the MIC will be covered by major reinsurance companies. This means that the MIC will be backed by "A+" rated, billion dollar reinsurance companies.
A reliable, reasonable source of liability insurance will be available, that accurately will reflect the industry's results and caters to your special needs.
In general, the goals of the MIC will be to provide ongoing premiums at attractive price levels, to accept only good risks so your premiums do not pay for the sins of poorly run marine industry individuals or firms, to insulate you from the high and low price swings of the conventional commercial marketplace and to operate a profitable insurance company. Profits in MIC will be used to augment surplus to ensure the long term viability of your insurance company and in future years may be used to pay dividends, offer loss control services or other risk management programs. Essentially, we have an opportunity to provide better service and pricing for ourselves than we have been receiving.
In meeting these goals, we will have a dedicated Board of Directors who understand the cyclical nature of the insurance market and professional management/service providers who are committed to the principals behind the formation of this company:- marine industry based underwriting, strong loss prevention efforts and a unified and experienced industry claims defense.
We will provide Liability, Umbrella and Excess coverages with limits to meet the needs of most insureds and through standard markets develop an attractive Property insurance program.
The future is bright for the marine business as it is for your Maritime Insurance Company. We look forward to the formation of and your participation in this Risk Retention Group and hope you join us in our efforts.
Sincerely,
Marine Trades Association
William J. Coates