WE WELCOME and enthusiastically endorse legislation introduced in the House of Representatives last week that would allow the nation's risk retention groups to provide property insurance to member-owners.

The long-expected legislation, introduced by Rep. Dennis Moore, D-Kan., would be the first expansion of the Liability Risk Retention Act since 1986, when lawmakers amended the 1981 law that gave RRGs their special status.

The original law that authorized risk retention groups was a congressional response to the market crisis of the late 1970s, when panic pricing in the commercial market led to huge and unjustified product liability insurance premium increases. The law pre-empted state licensing requirements to ensure that upon being licensed in one state, an RRG could provide coverage immediately to policyholders in any state.

Then in 1986, the law was expanded to allow RRGs to provide all types of commercial casualty coverage except workers compensation. With that expansion of underwriting authority, RRG formations soared. Today, close to 250 RRGs are operating and are a vital source of coverage for employers in a variety of industries.

If there is a good reason why RRGs should not be allowed to write property coverage for member-owners, we haven't heard it. While conditions in the commercial property market have improved for buyers in recent years, passing legislation allow RRGs to fund the coverage will help ensure that they can obtain coverage when market conditions deteriorate.

At the same time, we think more competition in the market can only be beneficial for buyers.

We hope legislators act on the proposal quickly and favorably.