Connecting RIMS members tops new president's agenda

ROCKVILLE, Md.—The tag line to the Risk & Insurance Management Society Inc.'s theme for 2010 sums up a big reason why RIMS' new president belongs to the society.

This year's theme is “Think forward, think risk.” And the tag line that follows—”connect, engage, inspire”—sums up “the leading reason I'm a member of RIMS,” said President Terry Fleming. “That is, the relationships I've made over the years and the chance I've had to connect, engage and be inspired by fellow risk managers, vendors and other people who are associated with RIMS,” said Mr. Fleming, who is director of the division of risk management at Montgomery County, Md., in Rockville.

Mr. Fleming succeeded Joseph Restoule, leader of risk management at Calgary, Alberta-based NOVA Chemical Corp., at the start of the year. Mr. Fleming pointed out this year marks RIMS' 60th anniversary.

Encouraging peer-to-peer benchmarking and dialogue, particularly given today's economic conditions, is one of four major priorities for Mr. Fleming and RIMS.

“We have a wealth of talent and knowledge in our membership, and with the economy the way it is with a lack of resources, we can turn to each other for a lot of help that we can't afford to purchase on the outside,” he said.

He cited as an example his experience dealing with insurance coverage for Montgomery County's new courthouse. He said the project required an architects errors and omissions policy, for which the developer wanted to charge the county $1.3 million. Mr. Fleming said a risk manager with “a huge property program” gave him some ideas that resulted in his being able to buy the cover for $300,000. “I saved my employer a million simply by being a member of RIMS.”

Mr. Fleming's other priorities include legislative and regulatory matters, an international strategy for RIMS, and student outreach.

“We want to continue to lobby for regulatory and legislative changes,” he said. This includes supporting legislation that would require some publicly traded companies to establish board-level risk committees, as well as bills to reform surplus lines regulation and establish a federal insurance office, he said. In addition, “we are going to continue to lobby for the optional federal charter” for insurers.

On the state level, RIMS would like to see broker contingent fees banned, said Mr. Fleming. “RIMS' position has always been to support a prohibition of contingent commissions because of the inherent conflict of interest when a broker receives payment from both buyer and seller in an insurance transaction.”

He noted that the New York State Insurance Department has proposed a regulation that would provide more transparency regarding fees. The proposal “does not ban the payment of contingent commissions, but does provide some level of transparency by requiring brokers to notify buyers who the broker represents in the transaction and that they will receive a payment from the insurer,” he said.

“The broker also must advise the buyer that additional information on compensation is available if requested,” said Mr. Fleming. He said RIMS has provided comments to the NYSID expressing its concern that the proposal does not go far enough, and calling for mandatory full transparency on compensation without the buyer having to ask for it.

On the international front, RIMS' continuing effort to develop a strategy is two-pronged, Mr. Fleming said. One focus is on offering RIMS products and services to U.S. companies with international operations, while the other is on offering educational services and risk management conferences in parts of the world “where there is a developing economy and a lack of risk management opportunities,” he said. Such efforts could even include setting up chapters, he said.

The fourth priority is student outreach. “We want to lower our demographic. I think the average age of a risk manager is around 44,” said Mr. Fleming.

He noted that risk management and insurance students typically start out working for insurance companies and brokers. “We are reaching out to Gamma Iota Sigma (the fraternity for risk management, insurance and actuarial science majors), and to professors and instructors in risk management, trying to develop a mentoring program where we can get these kids directly into risk management programs.”

In the area of professional education, RIMS will work with the Center for the Advancement of Risk Management Education and the American Institute for Chartered Property Casualty Underwriters on the new enterprise risk management course within the curriculum that leads to the associate in risk management designation, Mr. Fleming said. RIMS also will continue to offer webinars and has developed “coursecasts”—fee-based online training—that can lead to the RIMS Fellow designation.

He said there has been a slight drop in RIMS membership due to the economy. “Risk managers are losing jobs” and have to make cuts, he said. “That's a real challenge to continue to provide value to our employers with fewer resources.”

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