NEW YORK (May 21, 2009)Â âÂ The Risk and Insurance Management Society (RIMS) supports the efforts of Rep. Dennis Moore, D-Kansas, and Rep. Scott Garrett, R-New Jersey, on reintroducing the Non-Admitted and Reinsurance Reform Act of 2009 to the U.S. House of Representatives. This important legislation will provide much needed reform in the non-admitted and reinsurance markets.
"RIMS believes that the Non-Admitted and Reinsurance Reform Act of 2009 reduces the regulatory costs for insurers that are passed on to consumers and would make insurance more available and affordable," says Deborah M. Luthi, ARM, CCSA, member of RIMS board of directors and director of enterprise risk management services at Matheson. "RIMS urges the House of Representatives to once again pass this legislation and for the U.S. Senate to take it up as soon as possible."
The Non-Admitted and Reinsurance Reform Act of 2009 would:
- Allow brokers representing large policy holders to go directly to the non-admitted market to purchase insurance;
- Require all surplus lines carriers to meet certain financial, capital and other criteria in order to be eligible to provide surplus lines insurance in states; and,
- Preempt state insurance regulators from interfering in reinsurance agreements of ceding insurers domiciled in other states.
According to the legislation, in order for commercial insurance purchasers to gain expedited access to the non-admitted market, an insured must employ a "qualified risk manager" to work with a broker. Previously, RIMS lobbied members of the House Financial Services Committee to modify the original legislation to provide a broader definition of a "qualified risk manager" so that most of RIMS members and other risk practitioners would qualify. RIMS is pleased that the current bill incorporates the RIMS-approved definition of a "qualified risk manager".
The House unanimously passed its version of the surplus lines legislation in 2007 but the bill was never put to a vote in the Senate during the 110th Congress. RIMS looks forward to the prompt passage of the surplus line legislation in the 111th Congress. For more information on RIMS legislative activities, visit www.RIMS.org/LegislativeAction.