I couldn't comprehend, why this ring is needed. Please refer the pictures. Its a road bike (I am not sure if it matters or not, so felt like mentioning it).
In my Bicycle, this ring usually comes out loose, Should I be worried and get it replaced?
Edit: Its an old bike, I have myself rode on this one for nearly a 3K miles so far, since I bought it from a person who had been using it. The model might go down to be roughly 7-8 years old. Nonetheless, I love this one.
P.S.: Pardon me for poor quality of the images.