What is the primary purpose of a risk retention group?

The primary purpose of a risk retention group is to spread the liability of its group members. These groups are formed by businesses with similar risks, allowing them to pool resources to cover liability exposures that might otherwise be difficult or expensive to insure on an individual basis. By coming together in a risk retention group, members can share the costs associated with claims and losses, ultimately reducing the financial burden on each individual member. This collaborative approach enables them to manage risks more effectively and often at a competitive rate.

The other options do not capture the essence of what a risk retention group is designed to achieve. Limiting liability for specific individual risks is not the core function, as these groups are more about collective risk sharing rather than targeting individual liabilities. Insuring personal motor vehicle risks falls outside the typical scope of risk retention groups, which generally focus on commercial risks. Lastly, controlling global insurance policies is beyond the purview of these groups, which are primarily concerned with domestic liability risks specific to their member industries.