Get Ready to Hit the Hill

In this presidential election year, it’s difficult to turn on the television without being bombarded by political news and commercials. With all of the speculation about the candidate horserace and predictionsf or November, it’s easy to forget that Congress is in session—and that there is important work to do in 2008. Many issues critical to the insurance industry will be debated and framed this year, long before we elect the next president.

That’s why it’s so important for independent agents and brokers to educate legislators on insurance topics. From April 3–5, the Big “I” will hit Capitol Hill to share our perspective on a variety of issues affecting the way independent agents do business. And you need to have your voice heard by your legislators.

First and foremost on the Big “I” legislative conference agenda will be agent licensing reform (see sidebar). With limited progress on producer licensing reform being achieved since the passage of the Gramm-Leach-Bliley Act (GLBA) in 1999, targeted federal legislation is needed to ensure completely reciprocal non-resident producer licensing. With an increasing number of independent agents and brokers operating in multiple states, the lack of true non-resident licensing reciprocity is a growing problem for Big “I” members across the country. The Big “I” is currently working with Congress on this important issue, but legislators need to hear directly from agents and brokers on how current nonresident licensing obstacles impede growth and productivity.

Insurance regulatory reform generally is still a hot topic as proposals for an Optional Federal Charter(OFC) continue to gain steam. Agents need to reinforce to Congress that they support targeted federal legislation to reform the state regulatory system, which relies on more than 100 years of experience with states as insurance regulators, but oppose federal regulation. Clearly, the existing regulatory system needs to be modernized, but a one-size-fits-all scheme that creates a new federal bureaucracy is not the answer.

Natural disasters and flood insurance have received some attention in the presidential primaries—specifically proposals for a national natural catastrophe backstop, which were discussed during the Republican candidate debates in Florida. The Big “I” has been a leader in advocating for natural disaster solutions, testifying before the House Financial Services Committee and the Senate Banking Committee on the need for Congress to consider legislation to stabilize the insurance market for natural disaster risk. Last fall, the House passed an important flood insurance reform bill, which included many Big “I”-backed provisions, such as increased funding for flood map modernization, increased maximum coverage limits, optional business interruption coverage, additional living expenses coverage and optional replacement cost coverage for contents, among other improvements. With more severe weather predicted in the future and the expiration of the National Flood Insurance Program in September of this year, agents and brokers need to reiterate that reforming flood insurance and addressing natural disaster exposure are top priorities.

The potential repeal of the McCarran-Ferguson antitrust exemption for the insurance industry, crop insurance and tax issues for agents will round out the association’s legislative priorities for agents to share with their legislators. One issue that is thankfully absent from the 2008 lineup is terrorism insurance. Congress acted at the end of 2007 to extend the federal reinsurance backstop for an additional seven years under similar terms.

If you haven’t yet registered to attend the 2008 Big “I” Legislative Conference & Convention, go to www.independentagent.com and click on “Meetings & Events.” There you will find all the information you need to plan your visit to Washington, D.C., including event registration, hotel information and a detailed schedule.

Katie Butler (katie.butler@iiaba.net) is IA editor in chief

Agent Licensing: Priority No. 1

The Big “I” is currently working with leading Democrats and Republicans on the House Financial Services Committee to address the No. 1 issue for agents—producer licensing reform. In 1999, Congress passed financial services modernization through the Gramm-Leach-Bliley Act. One of the most important provisions of GLBA for the insurance marketplace was the NARAB subtitle, which established a mechanism to push statest oward producer licensing reform. The creation of NARAB did not occur because it was determined by the National Association of Insurance Commissioners (NAIC) that a majority of states achieved a specified level of licensing reciprocity or uniformity within a three year period. While NARAB helped put a limited number of states on the road to reform, the bar was not set high enough to achieve the licensing reform needed by agents and brokers.

An updated NARAB could finally achieve much needed reciprocity in producer licensing. Producers satisfied with the current non-resident licensing system could remain licensed in the traditional manner, but those producers dissatisfied with the current structure could apply for NARAB membership for non-resident licensing through the NARAB board, which would be separate and apart from the federal government. For producers operating in multiple jurisdictions and those that would like to expand their operations, NARAB would effectively create one-stop producer licensing for additional licenses beyond one’s home state. The Big “I” expects the NARAB bill will be introduced shortly.