Of course, the biggest story out of the nation's capital this year was the election of Barack Obama, which means the Democrats will control both the executive and legislative branches next year--a prospect not at all comforting to this generally Republican-leaning industry.
Shortly after the Illinois senator won the seemingly endless race for the White House over Republican rival John McCain of Arizona, industry observers were already fretting about the likelihood that a Democratic administration will appoint more plaintiff-friendly judges to the federal bench, as well as regulators who will take no prisoners as they impose new rules.
Most casualty insurers expect a jump in lawsuits, and many expressed concern that hard-won tort reforms may be overturned by trial lawyer-friendly Democrats in Congress.
In addition, the election of Barack Obama also puts health care reform on the front burner for the first time in 16 years, when President Bill Clinton took office and placed his wife--Hillary, the New York senator picked to be the next secretary of state--in charge of what turned out to be a failed campaign to revamp health insurance.
President-elect Obama also seconded calls for a national catastrophe program to back up state funds--perhaps a key to his victory in the crucial swing state of Florida. Whether his administration will overlook that issue in the flood of crises demanding the president's attention remains to be seen.
However, if another major hurricane hits Florida, a cat fund bill along the lines of the proposal pitched by ProtectingAmerica.org--a lobbying group heavily supported by Allstate--could jump to the front of the legislative lineup.
A more pressing disaster issue is reauthorization of the debt-ridden National Flood Insurance Program, scheduled to expire March 3, with the House and Senate at odds over whether to add wind coverage.
The near demise and federal bailout of American International Group also placed insurance front and center in the debate over financial services regulatory reform--even though AIG's state-regulated insurance arms remain sound and were not the cause of our financial meltdown.
Still, AIG remains the poster child of the haphazard bailout process, with the carrier facing ongoing criticism over its compensation system and other controversial business practices.
Will insurers finally be subjected to federal regulation next year? Probably not--unless they buy a thrift to be eligible for bailout funds from the Troubled Asset Relief Program, and thus come under a federal banking regulator's purview.
In an NU exclusive on Dec. 1, Washington Editor Arthur D. Postal, citing documentation from a private briefing to industry officials, reported that Sheila Bair, chair of the Federal Deposit Insurance Corp., said creation of a federal insurance charter is unlikely because the Obama administration is looking to consolidate and streamline regulation, not create new oversight bureaus.
Property-casualty insurers--already financially sound and well-regulated--are the least of Uncle Sam's worries right now, and for that the industry should be grateful.
