What are groups called where members insure each other using their own capital?

• A. Insurance Exchanges
• B. Risk Retention Groups
• C. Mutual Insurance Companies
• D. Self-Insured Groups

Answer: (B)

The term for groups where members insure each other using their own capital is "Risk Retention Groups." These are specialized groups that allow members to pool their risks and resources, typically in the context of specific industries or professions. By pooling their capital and sharing the risks, these groups provide liability coverage primarily for the members' own exposures, which may be difficult to insure through traditional insurance markets.

Risk Retention Groups operate under specific regulatory guidelines, allowing them to provide coverage at potentially lower costs since they are made up of members who share similar risks. This structure creates a collaborative environment where members actively participate in the insuring process, thereby increasing their engagement in risk management.

In contrast, other options like Insurance Exchanges and Mutual Insurance Companies operate under different principles. Insurance Exchanges facilitate transactions among various insurers and policyholders, while Mutual Insurance Companies are owned by policyholders but may not necessarily focus on mutual risk sharing to the extent of Risk Retention Groups. Self-Insured Groups may involve similar elements but typically refer to organizations that retain the risk rather than insure each other with pooled capital.