Legislation In House Would Create Federal License For Reinsurers

NU Online News Service, Dec. 17, 3:15 p.m. EST

WASHINGTON–Rep. Dennis Moore, D-Kansas, has introduced legislation in Congress with strong support from the reinsurance industry that would create a federal license for reinsurers.

However, Rep. Moore is retiring as of the next Congress, so the bill would have to be taken up by year end.

It is unclear if the Reinsurance Association of America (RAA), a primary supporter, has lined up another sponsor for the next Congress.

Barbara Carroll, an RAA spokesman, said, "We will continue to make the case for a strong Federal Insurance Office and for a federal reinsurance regulator, and look forward to working with interested Members of Congress."

The proposal would build on key insurance reforms championed by Moore that were included in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law earlier this year.

The bill is titled, the "Federal License for Reinsurers Act."

It would create a federal license for national reinsurers that would be administered by the director of the new Federal Insurance Office created by the Dodd-Frank Act.

According to Rep. Moore, the proposal promotes harmonization of international standards for regulating reinsurers, which would strengthen global efforts to monitor financial stability, while also supporting the need for a competitive and healthy reinsurance marketplace.

Moore offered a similar proposal to create a national license for reinsurers during the House Financial Services Committee's deliberation of financial reform in the 111th Congress. At the time, Rep. Moore withdrew the proposal to encourage prompt action on a broader, bipartisan agreement with respect to insurance reforms.

"The insurance reforms included in Dodd-Frank were a good first step in updating oversight of the insurance industry, but we shouldn't stop there," Rep. Moore said.

"The Federal License for the Reinsurers Act will build on the bipartisan, state-based reinsurance reforms included in Dodd-Frank, and enhance efforts by FIO to harmonize their work with international partners in better monitoring the reinsurance industry," he added.

Frank Nutter, president of the RAA commented that the legislation is a "logical step" in further implementing sound reinsurance regulatory reform.

Mr. Nutter said the bill "recognizes that it is critical for the FIO and its global partners to work together to improve international coordination and efficient oversight of reinsurance."

Reinsurance regulatory reform, Mr. Nutter said, "cannot be accomplished in a vacuum. It is a global business and requires international cooperation to effect a competitive and healthy global marketplace."