Top state officials in Rhode Island are supporting an investment change sought by FM to keep the corporation from considering leaving the state.
House Speaker Joe Shekarchi tells The Public’s Radio that FM, formerly known as FM Global, approached him within the last 30 days, “and it identified a concern and they asked me for assistance.”
Shekarchil said the change involves removing a 10% cap on the amount that insurance companies can invest in alternative investments. He said making the change would not cost anything new for taxpayers in Rhode Island and would put the state on an equal playing field with Massachusetts, which does not limit the investments.
“I think they want to create the best business atmosphere to stay and grow in Rhode Island,” Shekarchi said of FM, “and they made it clear that if they could not create a good business atmosphere, they would look for other alternatives.”
In a statement, Olivia DaRocha, spokeswoman for Gov. Dan McKee, said, “Governor McKee and his team have been engaged in ongoing discussions with FM on several issues, including the competitive landscape for Rhode Island businesses—and in particular, for the insurance industry. The Governor is committed to creating a level playing field to support our local businesses. To that end, he will be submitting legislation to address investment caps placed on Rhode Island-based insurance companies, an issue he has discussed with House and Senate leadership.”
Shekarchi said Lincoln-based Amica might also utilize the intended change.
FM spokesman Robert Julavits said the Johnston-based corporation has 1,381 employees in Rhode Island and almost 6,000 worldwide.
FM is a giant property insurance company founded in 1835 by Zachariah Allen, a Rhode Island textile mill owner.
In a statement, Julavits said, “FM welcomes this proposal, which we believe will help support business growth and competitiveness in Rhode Island and enable insurance companies in the state to manage their investments with greater flexibility without compromising policyholder protection.”
Shekarchi said he expects Rep. Alex Finkelman (D-Jamestown) to introduce a bill next week to remove the investment cap for insurers.
The speaker led an effort last year to address a tax change for banks after Citizens Bank raised a concern about it.
Hasbro is considering leaving its traditional home in Rhode Island, and that has raised concern among elected officials.
Shekarchi said FM is an $11 billion company “and we want to do everything we can to help them succeed and grow.”
