What is a group-owned insurance company that is formed to assume and spread the liability risks of its members called?

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a risk retention group. This type of organization allows businesses and entities with similar risk profiles to pool their resources and manage their own liabilities collectively. By doing so, members can better control their insurance costs and coverage, as they are sharing the financial risk among themselves rather than relying solely on commercial insurance companies.

Risk retention groups are specifically designed to cover liability risks, which includes providing insurance for risks that may be difficult to obtain from the standard insurance market. They are regulated by state laws and allow members to have more active involvement in how insurance is designed and managed.

The other options do not accurately describe the concept in question. Insurance mutuals are owned by policyholders but do not specifically focus on liability risks among members. Captive insurers are created to insure the risks of their parent company or group but differ from risk retention groups in terms of ownership and purpose. Self-insurance companies involve entities setting aside their own funds to cover potential losses but typically do not operate as shared risk entities among a group.