Down to the Wire

As the curtain came down on the 109th Congress, the Big “I” was there, fighting for regulatory reform, new natural disaster legislation and a terrorism risk insurance backstop.

Big “I” President Alex Soto testified before a subcommittee of the House Judiciary Committee in support of H.R. 5637, the Nonadmitted and Reinsurance Reform Act. Executive Committee member J. David Daniel represented the Big “I” before the crucial insurance subcommittee of the House Financial Services Committee to call for comprehensive natural disaster legislation. And Sharon Emek, chair of the board for the Independent Insurance Agents & Brokers of New York, testified before a joint hearing of two Financial Services subcommittees on keeping a federal terrorism risk insurance backstop in place beyond its 2007 sunset.

Soto commended H.R. 5637 as the right approach. “The IIABA supports the Nonadmitted and Reinsurance Reform Act of 2006,” Soto testified. “IIABA believes that this legislation is an excellent example of a pragmatic reform approach that utilizes targeted, federal tools to improve the state-based regulatory system. We are also hopeful that this approach will be used in the near future to facilitate additional reforms in the state-based system of insurance regulation.”

Soto noted that the legislation singles out two areas—surplus lines regulation and reinsurance supervision— where there is general consensus for early action, and said that independent insurance agents and brokers play a crucial role in surplus lines insurance, which provides coverage for unique or hard-to-place p-c risks.

Daniel testified that there needs to be a federal role in natural disaster preparation, and that several pieces of legislation that deal with this issue need Congressional attention.

“Put simply, insuring against natural disasters is a national problem that requires a national solution,” Daniel testified. “Despite our longstanding position that the insurance market is best served by limited federal involvement, we believe that a federal solution is necessary to help provide capacity and fill a void that the private market cannot and will not service. However, it is important that the day-to-day regulation of insurance remain at the state level, where state insurance departments are best equipped to serve the special needs of local consumers in local markets.”

Daniel noted Big “I” support for H.R. 846, the Homeowners’ Insurance Availability Act, introduced in 2005 by Rep. Brown-Waite. Her bill would allow private insurers to purchase, at auction, reinsurance contracts directly from the U.S. Treasury to cover natural disasters that are equal to, or greater than, a one-in-100-year event.

On terrorism insurance, Emek noted that terrorism risk coverage would become inordinately expensive and less available to businesses, particularly smaller ones, if the federal role lapses.

“It is crucial that all businesses have access to affordable insurance to protect them from this risk, and I personally have seen what can happen if they do not,” Emek testified. “In fact, after 9/11, a number of my friends had to close their businesses because they did not have sufficient business interruption coverage. Imagine how many businesses would go out of business without any business interruption coverage at all.”

These are just three examples of the Big “I” and its volunteer leaders representing your views in the halls of power. The association has the credibility and the influence that keep us at the table when important insurance issues are considered. We will continue, in the coming Congress, to advance your interests.

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

New Congress on Horizon

With the election season over, the current Congress has only a few weeks to finish its business before the new Congress is seated. We must bid friends such as retiring Financial Services Committee Chairman Mike Oxley (R-Ohio) a fond farewell, welcome back other allies and get to know the newest members whose decisions will affect our industry.

The Big “I” federal lobbying team, consisting of both Republicans and Democrats, is prepared to work with movers and shakers on both sides of the aisle in pressing insurance issues that matter to you in the 110th Congress: regulatory reform, natural disaster legislation, terrorism risk insurance, tax reform, flood insurance reform and many other issues important to independent insurance agents and brokers.

We need your help. Now is the time, particularly for those of you whose districts or states have new representatives or senators, to reach out and get to know these elected leaders, or to renew your ties with those returning for another term. Nothing is more important, in advancing your agenda, than your relationships with your legislators.