NEW YORK (August 27, 2012) – An official comment letter submitted by RIMS (the Risk and Insurance Management Society, Inc.) to and at the request of the U.S. Department of the Treasury provided the Society’s position on future policy regarding the national and international reinsurance markets. Composed, in part, from feedback of a survey of RIMS members, the letter also indicated that 85 percent of the respondents support the reauthorization of Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).
“The Federal financial backstop for terrorism risk must be maintained,” said RIMS President Deborah M. Luthi. “The past ten years have demonstrated that the private sector alone is not able to sustain a competitive and healthy market for terrorism risk insurance. While property exposures are one beneficiary, the transportation, special and sporting event and manufacturing sectors also need terrorism coverage. This letter serves as a reminder to FIO of the importance of TRIPRA while reinforcing RIMS’ support for its reauthorization next Congress.”
The comment letter also reiterated RIMS’ opposition to legislation introduced by Rep. Richard Neal (D-MA) and Senator Robert Menendez (D-NJ) that would place significant restrictions on domestic insurers which cede reinsurance to their foreign affiliates.
Ms. Luthi continued, “RIMS opposes legislative proposals that would negatively affect the global reinsurance market and United States businesses and organizations that rely on it. Particularly in this fragile economy, our member organizations, especially public entities, are more sensitive to impediments which inhibit their ability to readily and affordably purchase lines of insurance.”
RIMS letter to the FIO defined:
Ø the role that the global reinsurance market plays in supporting insurance in the United States;
Ø the effect of domestic and international regulation on reinsurance in the United States, including RIMS’ opposition to restrictions on domestic insurers which cede reinsurance to their foreign affiliates; and
Ø the role and impact of government reinsurance programs, including TRIPRA.
Today’s letter was delivered to The Honorable Michael McRaith, director of the Federal Insurance Office (FIO), and its content will be considered for inclusion in a formal report due to Congress in September this year. The full comment letter can be viewed at: go.rims.org/CommentLetterAug12
The solicitation for comment by Treasury is part of an effort to seek input from interested parties on a study and report due to Congress. The report is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For more information about RIMS External Affairs initiatives or about the RIMS International Committee, visit www.RIMS.org.