Living so close to Washington, D.C., and being a politicaljunkie, I follow Capitol Hill pretty closely, especially on issuesthat pertain to risk management. The broker transparency issue hasheld my interest for a while now and it is something I hope to seeaddressed by some substantial, lasting legislation. It's a topicthat is not just important to anyone who buys or sells insurance,but speaks to a larger need to look at risk in a whole new way.

From an insurance buyer's standpoint, broker transparencypresents an inherent conflict of interest with any party that bothserves an insurance buyer by brokering a policy transaction andreceives a payment from the insurers it directs business toward. Atthe core of the problem is that insurance buyers cannot say theyknow 100 percent that their interests are being put first unlesstheir brokers are completely transparent about who they receivecontingent commissions from.

So far, the brokerage community–with the exception of Willis,which must be commended for swearing off contingent commissionsentirely–has resisted any kind of law mandating transparency. Butuntil transparency becomes fully implemented, either by law or byindustry practice, the insurance transaction will remain asconflicted as it is qualified. In a world where insurance is morerelevant as the DNA of business than ever before, this situationcannot be allowed to stand.

But there are larger issues at stake here besides brokertransparency. For the Risk and Insurance Management Society (RIMS),this is just one of a number of high-level government initiativeswe are pursuing at the federal level. RIMS is advocating theformation of a federal office of insurance information so lawmakershave a comprehensive and nonpartisan source
of background when dealing with insurance issues such as systemicrisk, ratings and natural catastrophe coverage. We also areinterested in the optional federal charter, because we believe itis the best way to provide consistent regulatory coverage acrossthe entire U.S. when it comes to insurance.
As the AIG fiasco showed us, 50 different regulatory regimes arenot enough to prevent companies from falling through the cracks,even when they are too big to fail, and even when the risks theycarry can deeply impact us all.

RIMS' presence on the Hill has given us a great voice there, butit is still just one voice among many. Just as RIMS is reaching outto its student members and creating a dialogue with them, and justas we strive to create a dialogue among our members, we alsoencourage risk professionals everywhere–regardless of where theywork or what groups they belong to–to reach out to one another andto share what they know, see, and need.

As the last decade has shown us, the risks we manage are notgetting smaller, but the world they affect is, and the job of riskmanagement has become one that nobody can do alone. In an age ofglobal networking and instant conversation, we have a greaterability than ever before to pool our expertise, to manage risk moreeffectively, and to make the coming years a new age in ourdiscipline. All we have to do is seize this rare opportunity andmake the best of it. All we need to do, really, is to take a littlerisk.