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RIMS applauds financial services regulatory reforms

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WASHINGTON—The Risk & Insurance Management Society Inc. hailed the Senate’s approval Thursday of comprehensive financial services regulatory reform legislation that includes three longtime legislative goals of the risk management group.

One is a provision in the Restoring American Financial Stability Act of 2010 that would establish a federal insurance office in the Treasury Department. Another provision would streamline surplus lines taxation and regulation, and would ease qualified risk managers’ ability to access the surplus lines market as well as reform reinsurance regulation.

A third provision would require some publicly held corporations to set up risk committees that include at least one risk management expert.

All of these reforms have been legislative objectives of New York-based RIMS for the past several years.

But differences between the Senate bill and a measure approved by the House remain to be reconciled. The measures differ on how broadly the proposed federal insurance office could pre-empt state regulators. The Senate bill would give the office more power to do so on certain international insurance issues than would the House version.

“We feel very, very pleased that our hard work in moving forward these three agenda items as part of the bill will serve our membership well, and actually will elevate, in our opinion, the status of risk managers in their organizations,” said Scott Clark, RIMS secretary and director-external affairs.

RIMS wants the language establishing a federal insurance office to provide expertise at the Treasury to “be as strong as possible,” said Mr. Clark, who also is risk and benefits officer for the Miami-Dade County Public Schools in Miami.

The president of the Washington-based Council of Insurance Agents & Brokers, which had the surplus lines reform atop its legislative priority list this congressional session, is optimistic that the reforms will become reality. The CIAB also strongly supported the federal insurance office.

“While the broader bills must now be reconciled, a process that could be contentious on several big issues, the surplus lines provisions appear to be quite secure,” CIAB President Ken A. Crerar said in an e-mail.

Insurer groups, however, remain concerned over provisions that would restrict propriety trading by some financial institutions and remain divided over how much pre-emptory power the proposed insurance office should have. While the American Insurance Assn. has supported the broader Senate approach, the National Assn. of Mutual Insurance Cos. and the Property Casualty Insurers Assn. of America continue to favor the more restrictive House approach.