Rep. Moore introduced the Federal License for Reinsurers Act of 2010 in the U.S. House of Representatives last month saying the reinsurance market has fundamental differences to the insurance sector and therefore needed a separate licensing system.

He said the proposal was designed to build on key insurance reforms included in the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law last year.

 “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 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.”

Under the proposed bill the Federal License for Reinsurers Act would create a federal license for national reinsurers that would be administered by the Director of the new Federal Insurance Office (FIO) created by the Dodd-Frank Act.

He added: “The proposal promotes harmonisation 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. “

The Congressman had put forward offered a similar proposal to create a national license for reinsurers during the House Financial Services Committee’s deliberation of financial reform in the last congress but then withdrew the proposal in order to encourage prompt action on a broader, bipartisan agreement with respect to insurance reforms.

“Regulation of reinsurance differs from primary insurance, and requires a more tailored oversight approach,”Rep Moore explained. “The global reinsurance market continues to play a critical role in supporting the U.S. insurance market, and I call on Republicans and Democrats in the 112th Congress to build on the Dodd-Frank insurance reforms by considering this and related proposals as we seek to improve international coordination and efficient oversight of reinsurance.”

The move has been backed by the Reinsurance Association of America.

Frank Nutter, president of the Reinsurance Association of America said: “Rep. Moore’s legislation is a logical step in further implementing sound reinsurance regulatory reform. It 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 cannot be accomplished in a vacuum. It is a global business and requires international cooperation to effect a competitive and healthy global marketplace.”