NEW YORK—Nothing worries the CEO of the U.S. Chamber of Commercemore than increased regulation.

Regulators are "taking the joint over," Thomas J. Donohue toldinsurance-industry executives at the Property/Casualty JointIndustry Forum at the Waldorf-Astoria Hotel in New Yorkyesterday.

A champion for a free-enterprise system, Donohue says studentsare taught the three branches of government—legislative, executiveand judicial—but, he asks rhetorically, "Who the hell has studiedthe regulatory branch?"

The fiscal cliff may have been worrisome, says Donohue, but"there is something absolutely explosive happening on theregulatory side" as heathcare and Dodd-Frank legislation take hold,in addition to new labor regulations, for instance.

Regulation has the "capacity to tie the economy in knots," saysDonohue, who adds that the U.S. Chamber of Commerce sues the U.S.government about 150 times per year.

"I know this is a huge issue in your industry," he says. Donohueurged the insurance industry to provide more leadership onover-regulation issues.

The industry already has a start in that department. Donohue wasintroduced by Edward B. Rust Jr.—who is chairman of the U.S.Chamber of Commerce in addition to being the CEO of StateFarm. 

It would appear the insurance industry agrees thatregulation is a top concern. According to a survey conducted by theInsurance Information Institute, 74 percent of executives at theconference think the federal government is looking to expand itsoversight of insurers.

ENERGY IN THE THIRD BUCKET

Donohue gave the insurance audience a hint at some possibleopportunities when he suggested that energy could be crucial togrowing the economy and reducing the deficit.

Growth is typically done with two "buckets," says Donohue—oneholding items such as expense cuts and entitlement reductions andthe other holding an increase in taxes.

But a third bucket—energy—could be the key to growing jobs andexiting a current path toward trillions in debt accumulated peryear and barely making enough money to sustain ourinstitutions.

The U.S. could "move from the buyers to the guys who have moreenergy than anybody else."

With the oil, coal and technology this country has, it can bedone, Donohue says. And if politicians fear the environmentalists,"We can do this with clean energy," he says. "That's where the cashis."