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From the time it was first formed in 1986, and for the next eighteen years, coverage was provided to Allied’s member groups through a captive reinsurance structure, working with a wide range of carriers. While the use of “fronting” carriers provided the benefit of nationally known companies, these carriers continually demonstrated the behavior that has plagued the allied and alternative risk markets – a lack of commitment and understanding. As corporate priorities shifted, so would the interest and participation of these players.

In response to the continuing unpredictable nature of these markets, in 2003 Allied restructured the program to form its own issuing entity, Allied Professionals Insurance Company, a Risk Retention Group. Since the programs served fit perfectly into the exemptions provided under the Federal Risk Retention Act, Allied was able to successfully qualify as a Risk Retention Group. This gave Allied the flexibility to operate in all fifty states without the cumbersome rate and form filings of admitted carriers or the surplus lines tax filings of non-admitted carriers. Instead, Allied is taxed as an admitted carrier, yet is exempt from traditional rate and form filings. For a program with thousands of members scattered all over the country, each with very small amounts of premium, the Federal Risk Retention Act was the perfect solution.

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