This has nothing to do with women
butting up against a federal glass ceiling, but everything to
do with my foggy crystal ball.
With national elections only weeks away, it is fitting that
your lobbyist should gaze into the crystal ball, anticipate the
big issues affecting our industry in the coming congressional
year, and predict some outcomes. But glib predictions can be a
source of great regret. Here are some of my previously held
strong opinions, openly professed in these pages:
- Hillary Clinton will be the next president.
- No matter what, Chris Dodd will be chairman of the Senate
Banking Committee for the next four years.
- The Banking Committee’s ranking Republican, Sen.
Richard Shelby, will block any serious consideration of the
Optional Federal Charter (OFC) for insurers and
- The leadership of the National Association of Insurance
Commissioners will oppose even the narrowest of federal
preemptive insurance reforms—including surplus lines
legislation and proposals to create a federal insurance
advisor at the Treasury Department.
- Neither chamber of Congress would ever approve
legislation adding wind coverage to the National Flood
Whoops on all counts.
I wish I could have compensated with bold, correct
predictions, like figuring out Sarah Palin would be
McCain’s VP nominee.
On the big picture, obviously Obama and McCain emerged
despite the conventional wisdom, and though I wouldn’t
have guessed it a year ago, I wouldn’t have found it
shocking either, given their skills. But a year ago, if
you’d have told me that Hillary Clinton would emerge as
the voice of the disaffected, blue collar, rural Reagan
Democrats, I would have laughed.
On the particular issues, here’s the reality: If Obama
becomes president, chances are overwhelming that Dodd will move
on to chair the Foreign Relations Committee to succeed Sen. Joe
Biden or to the Health Education Labor and Pensions Committee
if, God forbid, Sen. Ted Kennedy, D-Mass., is incapacitated.
That puts Sen. Tim Johnson, D-S.D., author of the OFC
legislation, next in line at Banking. Johnson would be just
fine by us.
Sen. Richard Shelby, R-Ala., surprised all of us in the
industry when he openly expressed philosophical support for the
OFC during a Banking Committee hearing at which Council
Chairman Shad Steadman (of Rutherfoord) testified. Shelby is a
conservative southerner long skeptical of federal intervention
on much of anything. But without endorsing the particulars,
Shelby indicated the idea of an optional national regulator
made sense, giving a big shot of adrenaline to the long-running
debate over the extent to which the feds should be engaged in
For a presidential election year in which few expectations
for congressional progress are fulfilled, the federal
regulation issue has gotten a lot more juice than I would have
imagined. The NAIC, perhaps feeling the heat and the potential
loss of state hegemony, has come a long way in short time. Led
by Kansas Commissioner Sandy Praeger, the organization’s
leadership has endorsed The Council’s top legislative
priority: surplus lines reform. And perhaps more impressively,
the NAIC has worked with Congress on enactment of what many see
as the “camel’s nose”—creation of an
Office of Insurance Information at the Treasury Department. It
will serve as a clearinghouse and federal advisor with limited
preemptive authority (to overwhelm state laws that interfere
with foreign treaties).
Finally, I was stunned to see the House passing (fairly
easily) a proposal to add wind coverage to the federal flood
program. In dismissing that prospect, I figured the vote would
inevitably splinter along coastal/non-coastal grounds, with
only Gulf State representatives aggressively supporting it. I
hadn’t figured that House Speaker Nancy Pelosi, D-Calif.,
would put so much of her clout behind conservative Mississippi
Democrat Gene Taylor, who harbors all of the Trent Lott,
post-Katrina animosity toward the industry. Lesson learned:
Never underestimate one seriously talented, committed, and
pissed-off member of Congress who wants his way.
From a practical standpoint, I didn’t miss much. After
all, Congress has not passed major insurance reform. The Senate
made it clear that it will never go for the wind-coverage issue
as a part of flood reform, thanks in large part to the adamant
opposition of Sen. Shelby. And the NAIC still hates the general
idea of federal regulation.
Indeed, I may be nothing more than a vessel of conventional
Without knowing the outcome of the presidential election, it
is trickier than ever to assess our opportunities and
challenges. But here are two predictions anyway: Democrats will
pick up three to six Senate seats. Under no circumstance will
Republicans reclaim control of the Senate. And House control
will remain in Democratic hands, give or take a few.
Hearings will be exhaustive next year on insurance reform.
Expect to see some real action, though serious obstacles remain
for a full-blown, rate-and-form-preemptive federal charter for
all kinds of insurance companies. Will it be life-only, plus
large commercial p-c? Will it be something less and more
incremental? Will the soft market turn hard and flip
congressional sentiment against the industry? Will a natural
disaster of some kind create the environment for a federal
catastrophic reinsurance backstop? Will the energy, housing and
credit crisis crowd out health insurance reform as a top-tier
issue regardless of whether McCain or Obama is elected?
Wood is The Council’s senior vp of Government Affairs.