Posted on 26 Mar 2010
The Risk and Insurance Management Society (RIMS) today announced its support for the Senate Banking Committee's print, "Restoring American Financial Stability Act of 2010." Offered by Sen. Christopher Dodd (D-CT), chairman of the Senate Banking Committee, the legislation would promote greater efficiencies in the insurance marketplace for commercial insurance consumers, as well as require consideration of enterprise wide risk for certain financial entities.
"The print put forth this week by Sen. Dodd is a multifaceted piece of legislation that contains critical measures that impact the U.S. economy on many fronts," says Terry Fleming, president of RIMS and director, division of risk management for Montgomery County, Maryland. “RIMS believes its passage will usher in not only a more effective insurance market within the United States., but will also further the country’s influence abroad with regard to insurance issues.”
Championed by Sen. Charles Schumer (D-NY), senior member of the Senate Banking Committee, the print includes provisions requiring large financial institutions to establish risk committees in order to ensure greater consideration of, and control over, the management of risk on an enterprise wide basis. RIMS has long been a proponent of such a measure and applauds the committee’s decision to include it. RIMS views the inclusion of the risk committee requirement as recognition of the committees’ value to shareholders and to the greater financial stability of the U.S. economy.
In addition, RIMS praises the decision to include legislation to streamline requirements for the non-admitted or surplus lines insurance market, which is critical to the consistency and availability of procuring property/casualty insurance. This bipartisan proposal was introduced earlier this Congress and includes provisions that give “qualified risk managers” more direct access to the non-admitted market than current law allows. The U.S. House of Representatives has passed its version no fewer than three times and RIMS commends the Senate Banking Committee for moving this much needed legislation forward.
Finally, the print contains provisions that would create a federal office of insurance information, which RIMS supports as a necessary first step toward the federal government acquiring an expertise in insurance matters, as well as the ability to speak with one voice on international insurance issues. RIMS views this as an important precursor to the creation of an optional federal charter for commercial property and casualty insurers.