Opinion ID: 6968400
Heading Depth: 2
Heading Rank: 4

Heading: The PLRRA and LRRA.

Text: Congress specifically preempted some state insurance regulation — namely, those state laws regulating RRGs — with the enactment of the PLRRA and the LRRA. This is not in dispute. Congress enacted the PLRRA (and, later, the LRRA) because it felt that the tangle of myriad state regulations choked off RRGs: Federal action is necessary because experience has shown that individual state legislation cannot facilitate the formation of self-insurance groups. Individual states can only enact legislation affecting their respective insurance law requirements. The practical effect of these laws is to prevent product sellers in several states from forming such groups. Pub.L. No. 97-45, 1981 U.S.Code Cong. & Admin. News, at 1434. See also Meats Transp. Group v. State of Fla., 34 F.3d 1013, 1017 (11th Cir.1994) (the purpose of these preemption provisions was to facilitate “the efficient operation of risk retention groups by eliminating the need for compliance with numerous non-chartering state statutes that, in the aggregate, would thwart the interstate operation [of] product liability risk retention groups”), citing H.R.Rep. No. 190, 97th Cong., 1st Sess. 12 (1981), reprinted in 1981 U.S.C.C.AN. 1432,1441. The particular LRRA provisions meeting the McCarran-Ferguson’s requisite that preemption be explicit are found in 15 U.S.C. § 3902(a)(1) and (a)(4). § 3902(a)(1) prevents states from unlawfully regulating RRGs (directly or indirectly); § 3902(a)(4) prevents states from discriminating against RRGs “except as otherwise provided in this section.” Because of Congress’ intent that RRGs avoid excessive entanglement with state regulations, this preemption is central to effecting the purposes of the LRRA. See National Home Ins. v. State Corp. Comm’n, 838 F.Supp. 1104, 1109 (E.D.Va.1993) (“[T]he Act’s legislative history ... notes that preemption of state laws that inhibit the formation and continued operation of risk retention groups is ‘central’ to the Risk Retention Act’s objective of facilitating the development of risk retention groups”).