Tackling the Issues

Another successful Big “I” national conference is in the books. For the first time, the Big “I” combined its annual National Legislative Conference and Convention into one week, and it was a hit.

Once again, Big “I” members flooded the halls of Congress to lobby their elected leaders on important issues for independent insurance agents and brokers across America: insurance regulatory reform, flood insurance, natural disaster and terrorism backstops, tax and legal reforms and crop insurance, among others. Members in attendance did yeomen’s work in making the association’s presence felt in a big way on Capitol Hill.

While it is always important to attend the legislative gathering in Washington, D.C. and share your perspective, it is equally as important to maintain those efforts back home. The world of legislating doesn’t stop when independent agents and brokers leave Washington, and neither should your efforts.

In the coming months, members of the House and Senate will decide whether to pass several pieces of legislation that affect you, and whether even to bring other bills to the floor at all.

Certainly, one of the most important debates in Congress concerns the future of insurance regulatory reform (see sidebar). The debate is heating up between proponents of improving the state-based system via targeted federal legislation and those advocating an optional federal charter.

Another top issue that took center stage after last year’s active hurricane season is flood insurance reform. The Big “I” has been active in extending the National Flood Insurance Program’s borrowing authority in order to meet consumer needs, and also continues to push a comprehensive 22-point reform agenda it proposed in November. The agenda, among other items, calls for modernized coverage (e.g. inclusion of business interruption and additional living expenses), increased mitigation/decreased subsidization and additional funding for updated flood maps.

Additionally, the Big “I” continues to make the case for national solutions to disasters, whether natural or related to catastrophic terrorist acts, as these are national problems. The past few years have seen the kind of devastation that can ensue from these types of disasters. While the Terrorism Risk Insurance Act (TRIA) was modified and extended last year through 2007, a permanent solution is needed, and there is currently no federal mechanism for natural disasters.

Continued efforts on tax reform are also of tremendous importance to the Big “I,” which is working hard to get legislation passed that would help small businesses by modernizing the depreciation schedule for intangible assets in order to better reflect their useful economic life. Also crucial is the extension of past tax cuts that benefit small businesses and the elimination or significant overhaul of the estate tax, also known as the “death tax.”

Two other issues are also on the radar screen: legal reform and crop insurance. The Big “I” continues to seek real reforms to the asbestos-litigation system and ensure that farmers are well-served and protected by independent agents—the most effective distribution channel for crop insurance.

We need your continued support to make progress on these issues. So stay in touch with your elected leaders, both on Capitol Hill and in your communities, and continue to help InsurPac grow. The Big “I” maintains its influence when you are active.

Cliston Brown (cliston.brown@iiaba.net) is Big “I” director of public affairs/media relations.

OFC Heats Up

The debate between state-based regulatory reform and a proposed “optional” federal charter is heating up. Sen. John Sununu (R-N.H.) and Sen. Tim Johnson (D-S.Dak.) introduced OFC legislation in April.

OFC supporters are pushing hard, no doubt noting that House Financial Services Chairman Mike Oxley (R-Ohio), one of the leading opponents of federal regulation, has decided not to seek reelection this year.

Virtually every industry stakeholder—insurance companies, agents and brokers, consumers and regulators—has noted major concerns about the current regulatory system, calling it a “slow and inefficient patchwork” of laws and regulations, varying from state to state and adding unnecessary expense. That is why the Big “I” supports the State Modernization and Regulatory Transparency (SMART) Act currently being drafted by Chairman Oxley and Insurance Subcommittee Chairman Richard Baker (R-La.).

There is no question that reforms are necessary, but the Big “I” opposes an OFC for good reasons. We strongly believe that local insurance regulation works better for consumers, and the state-based system ensures a level of responsiveness that the federal government cannot match. Establishing a dual state/federal system would confuse consumers because some insurance products would be regulated by the states and others at the federal level. Additionally, federal regulation would create a huge federal bureaucracy with additional regulatory burdens on agents and brokers, negatively affecting members’ ability to represent customers. The baggage accompanying an OFC could be staggering, from Community Reinvestment Act-type requirements, to new privacy restrictions and more.

The next few months will be crucial. Let your elected leaders know why federal standards and targeted reforms are good, and why federal regulation is a bad idea.