Insurance Issues Heat Up

August recess is here, but Congress was busy finishing up legislation before the break, and insurance issues have not been left out. Due to the 2007 Big “I” Legislative Conference & Convention and the grassroots efforts of our agents, Congress has started to take action on some of the most important issues facing independent agents.

Last month, the House of Representatives took a step forward in reforming state insurance regulation by passing H.R. 1065, the Nonadmitted and Reinsurance Reform Act of 2007, a bill the Big “I” supports. This bill, sponsored by Rep. Dennis Moore (D-Kan.) and Rep. Ginny Brown-Waite (R-Fla.), will now move to the Senate side for consideration. The legislation singles out two areas—surplus lines and reinsurance regulation —where there is general consensus for reform. Independent insurance agents and brokers play a crucial role in surplus lines insurance. The bill streamlines surplus lines regulation by making the insured’s home state the source of regulation for individual surplus lines transactions.

The Hill has also seen action on terrorism insurance. On June 18, Rep. Michael Capuano (D-Mass.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) introduced the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA). The legislation would extend, on a long-term basis, the federal terrorism insurance backstop, which is set to expire at the end of the year. Long-term extension legislation is necessary in order to provide certainty to the insurance industry and consumers that terrorism coverage will remain available and affordable.

The Big “I” feels that a long-term renewal is necessary because the availability and affordability of terror¬ism insurance is a business customer problem throughout the country. In fact, take-up rates under TRIA have continued to grow, and Big “I” members have seen terrorism coverage purchased by a variety of business interests, from small towns to big cities.

Congress demonstrated its commitment to addressing this issue when, just days after the bill’s introduction, the House Committee on Financial Services’ Subcommittee on Capital Markets, Insurance and Government- Sponsored Enterprises held a hearing to discuss terrorism insurance and the new TRIREA legislation. Sharon Emek, immediate past chair of the Independent Insurance Agents & Brokers of New York, represented the Big “I” and expressed strong support for the recently introduced legislation. She advocated in favor of the program’s extension before the end of this year, expressed the need for reasonable trigger levels that meet the needs of both large and small insurers and outlined the need for coverage of nuclear, biological, chemical and radiological (NBCR) events. She also praised the bill’s creation of a 19-member blue-ribbon commission to propose long-term solutions for covering terrorism and the inclusion of independent insurance agents and brokers on the commission.

At the same hearing, the Treasury Department expressed its opposition to the TRIREA bill and stated that any extension of the program must “remain temporary and short term.” Despite this opposition, Congres¬sional and industry support—as well as policyholder demand—for a long-term extension of the terrorism insurance backstop remains strong.

Patrick Royal (patrick.royal@iiaba.net) is Big “I” director of public affairs.

Keep Up Grassroots Efforts

It may be August recess, but that doesn’t mean members of Congress are returning to their home states and districts to play in sandboxes. Most members will capitalize on their time at home by catching up with their constituents. With so many important insurance issues now before Congress, it’s critical that independent agents and brokers make their voices heard. August is the perfect time to reach out to senators and representatives.

Not sure how to start your grassroots efforts? It’s now even easier to make the grassroots connection because of updates to the Big “I” grassroots Web site. Go to www.independentagent.com, log on as a member, click “government affairs” and then click “grassroots.” The site can help you contact your members of Congress and also includes several suggested grassroots activities.