By CAROLINE MCDONALD, a freelance journalist who has written about the insurance industry for more than 15 years.
PHILADELPHIA -- The recognition and growth of risk management for companies globally has meant more involvement in the political scene and risk managers are looking for more effective ways to have an impact on politics and regulatory issues, prompting the formation of RISK PAC, according to leaders of the Risk and Insurance Management Society Inc.
"As risk managers move into strategic risk management and enterprise risk management, we find that politics, regulatory issues and compliance issues are risks for organizations and RISK PAC is a way to manage that risk," said Deborah Luthi, RIMS' president in 2012.
Luthi spoke at a press conference last week during the RIMS Annual Conference and Exposition in Philadelphia.
RIMS was attended by a total of 8,922 people, including 950 first-timers, said RIMS Executive Director Mary Roth. Attendance was higher than in Boston two years ago, the last East Coast city hosting RIMS. East Coast locations typically attract higher numbers, she said. RIMS last year was held in Vancouver, B.C.
Roth called the 950 first-time attendees "exceptional." International attendees made up about 10 percent of attendance, she also said. Countries with the greatest attendance outside of the United States were Canada, the United Kingdom, Bermuda and Brazil.
Student conference attendance has jumped from 50 student members in 2010 to more than 600 students today, Roth said. The student advisory council, Roth said, is "dedicated to ensuring that the next generation will become involved with RIMS and also encouraging the next generation to become risk practitioners."
RISK PAC, announced at last year's conference in Vancouver, allows the organization to "build on many things our government affairs group has been working on overtime," Luthi said. "It is a tool for us to have influence and to advocate for those political, compliance and regulatory risks that are a concern to our organizations."
Luthi said that RISK PAC is bipartisan and will contribute to both Republican and Democratic candidates. "It is to ensure that RIMS has a spot at the table and a voice that will be heard for our members."
So far, some contributions have been approved and the goal is to raise $28,000 this year, she said. A founder's reception was held at the conference last week, for members who are U.S. citizens or hold a Green Card. "It will give those who are founding members and trustees an opportunity to understand that this is a tool. A personal contribution to RISK PAC is a way we can make a difference," she said.
Dan Kugler, 2012 board liaison for the External Affairs Committee, or XAC, gave an update on federal and state regulatory initiatives. The XAC encompasses both federal and state regulations, regulatory efforts and initiatives within those bodies. He joked that whether it's called the "silly season" or the "lame-duck session," it's questionable how much will get done during the balance of this year.
RIMS is awaiting a report from the Federal Insurance Office on insurance modernization, he also said. RIMS submitted comments to the agency and the agency expects the report to be released by the end of May.
Four bills top the RIMS list. They include:
* Reauthorizing the National Flood Insurance Program. There is "some urgency because the program's funding expires May 31. Our recommendation is a five-year program," Kugler said, adding that RIMS is working in concert with other organizations to try to jump-start the U.S. Senate for five-year reauthorization reform. Bipartisan legislation was passed overwhelmingly in the U.S. House of Representatives last year and passed unanimously out of the Senate Banking Committee.
* The SMART Act, or Strengthening Medicare and Repaying Taxpayers. "We support bipartisan legislation in the House and Senate to streamline the reporting process for insurers, self-insurers and non-group health insurers who are secondary payers, where there is a settlement with a Medicare beneficiary," he said. This would permit secondary payers who are settling claims to repay the Medicare trust fund and avoid potential high fines.
* Risk Retention Act amendment HR 2126, introduced last year by Rep. Peter Welch (D-Vt.) and Rep. John Campbell (R-Calif.). The bipartisan legislation "has been around for several Congresses and expands the Liability Risk Retention Act beyond product liability and other forms of liability insurance to permit risk retention groups to also write commercial property insurance," he said. The bill, however, has been "caught up in partisan politics, as the legislation as initially drafted would have given the Federal Insurance Office authority over the risk retention groups and any perceived enlarged role for the FIO is viewed with great skepticism by the majority of Republicans on the House Financial Services Committee."
* Neal-Menendez legislation. Rep. Richard Neal (D-Mass.) and Sen. Robert Menendez (D-N.J.) introduced HR 3157 last year. It would change current tax law and penalize the common practice of domestic insurers taking a tax deduction on reinsurance premiums that are ceded to their offshore affiliates. "The tax code presently permits the deductibility of secessions to offshore affiliates," Kugler said. "RIMS supports the practice and the current law and opposes the Neal-Menendez legislation.
April 23, 2012
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