A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a:

A group-owned insurance company that is designed to assume and spread the liability risks of its members is known as a risk retention group. This type of organization allows member policyholders, who typically have similar risks, to pool their resources. By doing so, they can more effectively manage their exposures and share the costs associated with those risks.

Risk retention groups are often formed by businesses in the same industry or profession that face comparable liabilities, enabling them to benefit from collective bargaining power and reduced premiums compared to traditional insurance markets. The structure of a risk retention group is particularly beneficial for these members as it allows for a more tailored approach to insurance coverage, ensuring that the specific needs and characteristics of the group are taken into account.

In contrast to risk retention groups, the other options do not accurately describe this function. A treaty insurer is involved in a reinsurance contract agreement, a risk assumption group is not a commonly recognized term in this context, and a captive insurer is typically an insurance company created and owned by a parent group to insure its own risks. None of these alternatives encompass the same collective liability risk-sharing purpose as a risk retention group does.