RIMS outlines global reinsurance market policy positions

The Risk and Insurance Management Society, Inc. (RIMS) is reiterating its opposition to draft legislation that would place significant restrictions on domestic insurers that cede reinsurance to their foreign affiliates.

That view was offered in an official comment letter to and at the request of the U.S. Department of the Treasury. Composed in part from feedback of a RIMS member survey, the letter details the society’s position on future policy regarding national and international reinsurance markets.

“RIMS opposes legislative proposals that would negatively affect the global reinsurance market and United States businesses and organizations that rely on it,” society president Deborah M. Luthi says in a press release. “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.”

The RIMS letter defines a number of issues: the role the global reinsurance market plays in supporting insurance in the U.S.; the effect of domestic and international regulation on reinsurance in the U.S.; and the role and impact of government reinsurance programs, including the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).

Findings from the member survey indicated that 85% of respondents support TRIPRA. “The federal financial backstop for terrorism risk must be maintained,” Luthi emphasizes.

“The past 10 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,” she says.