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Under the Dome by Joel Wood 20/20 Hindsight

Bush may be loathed by most Americans, but for our industry, he's looking better all the time. History may judge him kindly.

By  Joel Wood

I believe George W. Bush is a bold leader and that, like Harry S Truman, history will judge him kindly.

There, got that out of the way.

What kind of a leader has he been for the insurance industry? The record has its ups and downs. Let’s cover three major issue areas I’m paid to influence—TRIA, insurance regulatory reform and employee benefits.

TRIA. I’ll give the president a big break at the moment, since he just signed a seven-year extension of the Terrorism Risk Insurance Act. In a congressional environment unfriendly to insurers, the TRIA extension was a huge win for the industry and the business community.

Nobody made him sign it. With tanking approval ratings and no member of his administration running to succeed him, the man has nothing to lose.

The immediate post-9/11 President Bush championed TRIA. But post-TRIA enactment? The right-wingers took charge of the economic agenda and alleged TRIA was “crowding out” private-sector innovation. The administration has fought for a scaled-back program that would sunset as the global markets learned how to price terrorism risk.

Now, this conservative Republican lobbyist gets a Barney Frank-like fervor going on the subject of how the federal government has a fundamental obligation to protect Americans from the economic hazards posed by Islamic terrorists, with TRIA being the logical public/private partnership to do it. The ideologues who think markets will be just fine without TRIA are dead wrong. But then again, the new extension means free federal reinsurance well into the future, with insurers providing and brokers selling. President Bush signed it into law. This is a very good deal.

REGULATORY REFORM. From the standpoint of getting things enacted on federal insurance reform, neither the Bush administration nor Congress has anything to show.  No one I know ever expected this Republican administration to touch, much less embrace, the cause of progressive federal insurance intervention. The first two Bush Treasury secretaries, Paul O’Neill and John Snow, were politically weak, had little grounding in financial regulation and no particular interest in the issue. Wall Street legacy Hank Paulson has been a breath of fresh air. Assistant Secretary David Nason has made a series of statements about the obvious U.S. competitive disadvantage due to disjointed, redundant, protectionist and ineffective state-by-state regulations. The administration hasn’t endorsed the Optional Federal Charter (OFC), but the rhetoric has been extremely positive. Last fall, the department requested (in a standard bureaucratic milquetoast way) comments on the subject. In a telling bit of comic relief, the National Association of Professional Insurance Agents, vying for the role of most belligerently anti-reform, denounced the very act of Treasury seeking comments, saying the deck is stacked in favor of the OFC. 

Nothing much is going to happen on the OFC in 2008, but the tone set by the Bush Treasury Department adds credibility to the long-term effort.

EMPLOYEE BENEFITS. President Bush is at the vanguard against federalization of health insurance, and he’s opposed to creeping mandates. Good for him. His 2000 campaign rhetoric in support of a “patient bill of rights” hasn’t been matched by action, which makes us happy, too. But Bush has been stubborn, ideological and wrong on two issues throughout his presidency: Association Health Plans (AHPs) and “consumer-driven health care.”

The AHP proposal championed by the Administration would exacerbate market inequities and allow actuarial cherry-picking to run amok. When Republicans ran the House, they repeatedly passed that AHP legislation, only to see it die in the Senate. With Democrats in control of both chambers, it has zero traction.

The “consumer-driven” issue has been more problematic. Insured Americans generally don’t have enough of a personal stake in health care funding decisions. Health Savings Accounts and flex plans are the right kind of “consumer-driven” tools to achieve these goals (and they’re broker-friendly, too). But West Wing conservatives have gone too far, advocating to eliminate tax breaks for employers who provide health insurance for workers. 

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