Big Election Gains for Republicans Shift Outlook on Agent Issues

When the dust settled after last month’s elections, Republicans had regained the U.S. House of Representatives by winning more than 60 seats and made significant wins in the Senate by narrowing the Democrat majority by six seats. A near-even Senate, Republican House and Democratic White House mean a divided government in the next Congress that is expected to somewhat limit consideration of controversial bills. The House Republicans are touting their plans to hold the Obama administration accountable and force officials to testify before congressional committees by using one of their most potent weapons: oversight authority and subpoena power. The election results are expected to impact several issues important to independent insurance agents and brokers, including:

Health Care Reform: As one of their first actions in 2011 with the 112th Congress, House Republi-cans are expected to push a bill to repeal the recently passed health care overhaul law. The political real-ity is that as long as the Democrats control the White House and the Senate, any repeal is highly unlikely to become law. Republicans are likely to attempt a repeal through a multiyear process with an eye toward taking back the White House in 2012. In the short term, House Republicans are expected to turn to the appropriations process to attempt a piece-by-piece defunding of numerous programs in the bill which includes approximately 115 separate appropriations. Although the House does have the so-called “power of the purse,” this strategy will face challenges in a Senate with continued Democrat control. Although the House Republicans may not be successful in passing bills to repeal or alter the health care overhaul law, they may use subpoena and oversight power to help shape the regulatory process and implementation of the law. This may prove to be a powerful and effective tool, and could lead to some favorable results for the independent agency system and small businesses.

Financial Services Regulatory Reform: Another possible item on the Republican to-do list is the Dodd-Frank Wall Street Reform & Consumer Protection Act. Although this effort was mostly a reaction to the banking and housing collapse, it also contained several items regarding insurance, such as the creation of a non-regulatory Federal Insurance Office, the passage of Surplus Lines Reform and possible systemic risk oversight of very large insurers.

Since this was also a major item on President Barack Obama’s agenda, any bill attempting to significantly modify or defund any portion of the law is likely to hit major roadblocks. However, House Republicans are expected to also turn to their subpoena and oversight authority to shape its implementation. The new law mandates hundreds of new rules and provisions to be undertaken by at least 11 different federal government agencies, which means there are many opportunities to shape the details.

Flood Insurance Reform: The last few years have seen ever-increasing skepticism on both sides of the aisle regarding the National Flood Insurance Program (NFIP). With the Republicans in control of the House, this is only likely to become more evident. The NFIP’s current authori-zation expires on Sept. 30, 2011. The Big “I” continues to work hard to gain support for a long-term extension and much-needed reforms.

Taxes: Republican control of the House dramatically improves the prospects for overall tax relief. Significant compromise between the House, the Senate and the White House is expected,, especially since every major tax relief provision enacted since 2001 expires at midnight at the end of this month. The lame duck Congress is currently attempting to address this looming issue before the stroke of midnight on New Year’s Eve.

Crop Insurance: Against the wishes of the Big “I” and thousands of crop insurance agents, farmers and ranchers across the country, the Stan-dard Reinsurance Agreement negotiations led by the Obama administration imposed a cap on agent commissions and cut the crop insurance pro-gram by $6 billion. With a Republican majority in the House, the 2012 Farm Bill negotiations are expected to move at a slower pace in an effort to reach bipartisan consensus. The Big “I” will continue to keep a watchful eye on any additional efforts to cut the crop insurance program.

Big “I” PAC Scores Big in Election

In the 2010 election cycle, the Big “I” political action committee (PAC), InsurPac, distributed $1,722,750 in support of 265 races, winning at least 247 of them for an amazing 93% victory rate. More than 5,000 independent agents came together to support InsurPac with personal, voluntary contributions. InsurPac supported more House and Senate campaigns than ever before, and dis­tributed a record amount of money as the largest PAC representing the property-casualty insurance market.

InsurPac distributes 100% of its voluntary agent contributions to fed­eral campaigns and, as a result, has an impressive bipartisan track record in Congress and on the campaign trail. In disbursing contributions, InsurPac does not look at party affili­ation but supports U.S. representa­tives, senators and candidates for federal office who have been advocates and supporters of the independent agency system.