RIMS, RAA Offer OFC Bill Support

WASHINGTON--The Reinsurance Association of America and the Risk and Insurance Management Society are both voicing strong support for the optional federal charter legislation introduced yesterday in the Senate.

In its comments, RAA noted that a "critical" feature of the legislation is the single regulator's authority to achieve bilateral regulatory arrangements with foreign countries that would provide for recognition and enforcement of substantially equivalent regulatory standards and enforcement in other regulatory jurisdictions.

Frank Nutter, RAA president, said bilateral recognition will allow U.S. and non-U.S. reinsurers alike to conduct trans-border business relying on the home country's regulation.

"This can best be achieved through federal legislation," Mr. Nutter said. In general, he said, "reinsurance regulation needs to be harmonized with the global structure of reinsurance regulatory transactions."

"An appropriate reinsurance regulatory structure should include a single regulator for reinsurance with national regulatory oversight to achieve uniformity of regulation within the U.S.," he added.

Speaking for RIMS, Terry Fleming, member of RIMS board of directors and director of risk management for Montgomery County, Md., said the group has "long supported the concept of an optional federal charter."

"We look forward to reviewing the bill so that we can endorse it in its current form or offer suggestions for enhancements," Mr. Fleming added.