RAA Praises US Budget Risk Transfer Amendment

The Reinsurance Association of America (RAA) is praising an amendment to a fiscal 2021 US budget document that encourages federal agencies and departments to take advantage of risk transfer options.

The amendment, introduced by Rep. Blaine Luetkemeyer (R-MO), encourages US government agencies that hold credit, guarantee, or insurance risk that could expose American taxpayers to potential losses to explore risk transfer options and employ opportunities to transfer those risks to the capital and insurance markets.

Rep. Luetkemeyer's amendment was approved by the House Financial Services Committee and supported by Committee Chairwoman Maxine Waters (D-CA).

The amendment notes that the successful risk transfer programs at the Federal Housing Finance Agency, the National Flood Insurance Program, and the Export-Import Bank demonstrate that federal agencies can manage their risks and mitigate potential losses in their portfolios.

In a statement, Frank Nutter, president of the RAA, said, "RAA commends Congressman Luetkemeyer and Chairwoman Waters for their continued leadership in supporting transferring risk from federal programs to the private sector.

"Risk transfer programs will improve federal program risk analysis and management while easing the financial burden for risk now borne by the federal government and, ultimately, the American taxpayer," Mr. Nutter said.