RIMS backs Paulson’s regulatory revamp

The Risk and Insurance Management Society, Inc. (RIMS), has backed US Treasury Secretary Henry Paulson’s call for an optional federal charter for insurance regulation as part of its recently released financial system regulatory revamp.

The administration’s proposal would permit insurers operating under multiple state jurisdictions the option to be regulated at the national level.

Terry Fleming, member of RIMS board of directors and director of risk management for Montgomery County, Maryland, said: “RIMS is encouraged that the U.S. Treasury has proposed an optional federal charter for insurance. The risk management and commercial insurance buyer community has long supported the concept of an optional federal charter and believe that a regulatory system structured in the method proposed will provide an effective and much more efficient process to manage insurance transactions for policyholder operations.”

The proposal recommends establishing an Office of National Insurance within the Treasury Department to be charged with regulating insurers opting for a federal charter.

The blueprint also calls on lawmakers to create an Office of Insurance Oversight within the Treasury Department in order to address international regulatory issues.

RIMS supported the National Insurance Act of 2007 because it addressed current inefficiencies in the system that impede policy innovation, pricing and delivery.