RIMS Supports New OFC Bill

The Risk and Insurance Management Society Inc. said it will work to secure passage of recently introduced legislation that would create a dual federal-state system of regulation and supervision for insurers, agents and brokers.

Joining 10 other financial groups in expressing support, RIMS said it backs the efforts of Rep. Ed Royce, R-Calif., and Rep. Melissa Bean, D-Calif., who reintroduced “The National Insurance Act of 2007″ in the House of Representatives on Wednesday.

Under the bill, insurers and producers would both be free to elect federal or state regulation, charters and licenses, and states would maintain responsibility for regulating state-licensed insurers and producers.

This important piece of legislation represents a much-needed step forward in the process of insurance industry modernization, New York-based RIMS said.

“RIMS is encouraged that the bill has been introduced in the House,” Terry Fleming, a member of RIMS board of directors and director of risk management for Montgomery County, Md., said in a statement. “We look forward to working with Reps. Royce and Bean in their efforts to modernize insurance industry regulation.”

He added, “RIMS has long supported the idea of an optional federal charter and believes that a regulatory system structured in this way would hold enormous benefits for the policyholder community.”

RIMS noted that it supported the optional federal charter bills that were introduced in the House and the Senate in 2006.

The Society said it endorsed both bills because of a “long-standing belief that the U.S. financial services regulatory system, as it currently is structured, impedes the ability of insurers to develop and deliver products in the most efficient and effective manner.”

RIMS said its members–the buyers of commercial insurance–strongly support efforts to increase competition and market efficiency.

RIMS said it will continue to work closely with Reps. Royce and Bean, as well as the cosponsors of similar legislation introduced in the Senate in May, to reform insurance regulation through the creation of an optional federal insurance charter.