The U.S. House Financial Services Committee’s Housing and Insurance Subcommittee is holding a hearing on reinsurance and credit risk transfer (CRT), with Subcommittee Chairman Mike Flood outlining how both tools redistribute risk that might otherwise be concentrated in a single firm or institution. In opening remarks, Flood described reinsurance as “insurance for insurers,” using an example of a small mutual home insurer facing correlated catastrophe claims, and presented CRT as a mechanism used by Fannie Mae and Freddie Mac to move mortgage credit risk off the Enterprises’ books. He framed CRT as a way to place private capital ahead of taxpayers in the event of mortgage defaults and reduce taxpayer exposure to mortgage-market downturns, while noting downstream effects on consumers through insurers’ ability to pay claims and the functioning of the conforming mortgage market. Flood also requested that a letter from the National Association of Realtors be entered into the hearing record.
U.S. Financial Services Committee 2026-04-22
U.S. House Financial Services Committee holds Housing and Insurance Subcommittee hearing on reinsurance and credit risk transfer
The U.S. House Financial Services Committee’s Housing and Insurance Subcommittee held a hearing on reinsurance and credit risk transfer, with Chairman Mike Flood highlighting their role in redistributing risk that might otherwise be concentrated in a single firm. Flood described reinsurance as “insurance for insurers” and credit risk transfer as a tool used by Fannie Mae and Freddie Mac to move mortgage credit risk to private capital ahead of taxpayers, affecting insurers’ claims-paying capacity and the conforming mortgage market.