Editors' Cuts

Will Election Results Roil the Regulatory Landscape?

Bill Kenealy
Insurance Experts' Forum, November 4, 2010

There is little doubt that the results of the midterm elections will reverberate throughout the insurance industry.

The real question is how much and where. While the breadth of the Republican victory is impressive (60 seats and control of the House of Representatives and 6 seats in the Senate), it is still probably insufficient to repeal the two recent landmark legislative actions, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Patient Protection and Affordable Care Act.

Indeed, considering the fact the Democrats still control the Senate and the White House, Speaker of the House-elect John Boehner’s stated goal of repealing the health care reform bill in its entirely seems like posturing. In a similar vein, the desire of Rep. Scott Garrett (R.- N.J.) to thoroughly alter the nature Dodd-Frank, including dismantling the newly minted consumer protection bureau before it gets off the ground, can only be seen as slightly less quixotic.

With President Obama acknowledging he is amenable to “tweaks” to health care reform, what does seem likely is that Republicans will be able to exact some minor concessions from Democrats. Considering the political reality, anything bolder emanating from the House will ultimately result in gridlock.

With major changes thus unlikely, what will undoubtedly change is the human terrain on Capitol Hill. Spencer Bachus, (R-Ala.), who is the lead candidate to take the Financial Services Committee gavel from Barney Frank, is seen as favoring targeted reforms over wholesale changes. Garrett, who will likely chair the Capital Markets Subcommittee, is well versed in insurance issues and was recently presented the Federal Legislator of the Year Award by the National Association of Mutual Insurance Cos.

Given the low odds for repeal, many in the insurance industry are rightfully focusing attention on the implementation and rule-making phases of HCR and Dodd-Frank.

“Most immediately, AIA's efforts will remain focused on implementation of the Dodd-Frank financial reform legislation,” Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), said in a statement.

Despite Dodd-Frank’s creation of a Federal Insurance Office, insurance will remain predominantly legislated at the state level. Accordingly, the eight governships and 16 state legislative bodies Republicans wrested from Democrats may well birth a more immediate challenge for the industry.

“There remain about two dozen yet-to-be-named state insurance regulators who will be appointed in coming weeks,” Pusey said. “While each state is unique, the overall legislative environment should improve as states will be more likely to foster an environment that understands the issues facing the business community.” 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Driverless Cars: Unintended Consequences for Insurers to Watch

When bad or unexpected or unusual things happen, the computer gives up control and hands it back to the now woefully unprepared occupant.

Why Insurers are Leading on Data and Analytics

A State Street survey finds insurance companies are more likely to be further along in becoming “data innovators” than their financial services counterparts.

The Other Auto Insurance Telematics Shoe Drops

Progressive's decision to charge Snapshot drivers more if their driving data indicates higher risk has started the industry down a road of data-driven adverse selection.

Core Transformation – Configuring in the Rain

The whole point of core transformation is that changes at the micro level can be used as a stimulus for changes at the macro level.

6 Ways to Develop a Productive IT-Business Dialog

Relationship management 101 for keeping IT and business on the same page.

Unified Digital Strategy: Succeeding in the Digital Revolution

A unified digital strategy recognizes that all business strategies and technologies touch the customer in some way and that a one-size-fits-all channel model is obsolete.