An Everest Group executive testified on the importance of reinsurance during a Congressional hearing in Washington.

Everest Group’s executive vice-president and general counsel, Anthony Vidovich, was representing the Reinsurance Association of America at a legislative hearing before the United States House Subcommittee on Housing and Insurance.

Mr Vidovich highlighted how reinsurance benefits government programmes by shifting risk to private markets, helping federal programmes manage exposure, better assess and price risk, and lower costs to taxpayers by reducing the likelihood that they are asked to absorb large-scale losses.

A statement from the RAA said he noted the positive role reinsurance plays in the Federal Housing Finance Agency’s credit risk transfer programme for Fannie Mae and Freddie Mac, the Federal Emergency Management Agency’s National Flood Insurance Programme, and the Export-Import Bank of the US pilot reinsurance programme.

He also recommended that banking agencies update US bank capital rules to make reinsurance available to US banks, with capital relief. This would help US banks better manage risk and support access to credit, while maintaining strong regulatory oversight, and enhancing the safety and soundness of the banking system.

“RAA is grateful for this opportunity to share details about the key role reinsurance plays as a risk management resource used by private sector companies and federal government programmes,” said Tracey Laws, RAA president and chief executive officer.

“The positive impact reinsurance has had on FHFA’s credit risk transfer programme, Fema’s National Flood Insurance Programme and the Exim Bank demonstrates how reinsurance can play a critical role in supporting the private and public sectors and saving taxpayers money.

“RAA also continues to encourage banking agencies to update US bank capital rules to make the reinsurance risk management tool available to US banks, with capital relief.”