Independent agents will certainly have a lot to talk about when they storm Capitol Hill en masse later this month to meet with their congressional representatives to lobby on critical issues ranging from federal regulation to terrorism and flood insurance.

Indeed, agents who gather here from April 26-29 for the Independent Insurance Agents and Brokers of America's annual National Legislative Conference will have a full agenda to jawbone about with federal lawmakers. (For the first time, IIABA will also hold its annual convention as part of the week-long event in Washington.)

“Obviously, our number-one issue will be our opposition to the Sununu/Johnson bill, S. 2509, to create an optional federal charter for the insurance marketplace,” noted Charles E. Symington Jr., senior vice president of government affairs and federal relations for the IIABA.

“This legislation will dominate this year's event, and our 1,500 independent insurance agents who attend our national conference will be expressing to virtually every congressional office why we strongly oppose this legislation,” he added.

As an alternative, “our agents will also be on Capitol Hill expressing their support for targeted federal legislation to modernize the state-based system,” noted Mr. Symington, referring to the SMART (State Modernization and Regulatory Transparency) Act being drafted by the Republican leadership of the House Financial Services Committee.

The SMART bill would establish federal standards for state regulators. It is unclear when it will be introduced.

The OFC legislation was introduced last month in the Senate by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D. A hearing in the Senate Banking Committee is likely by Memorial Day, the senators said at a press conference introducing the bill.

Meanwhile, in the wake of Hurricane Katrina–for which many homeowners lacked flood coverage, and which has sparked coverage disputes over wind versus flood damage–flood insurance reform is another critical issue for agents, Mr. Symington noted.

“Our agents will be speaking with their congressional representatives about the importance and necessity of the [National Flood Insurance Program] and the need to reform the program and bolster it for the future,” he said.

“This includes both the modernization of coverages provided by the program–such as the need to include optional business interruption insurance and optional additional living expenses coverage–as well as making the program more fiscally responsible,” he added.

Legislation acceptable to the industry recently passed the House Financial Services Committee and is awaiting floor action. But a tougher bill mandating solvency for the program and perhaps curtailing the Write-Your-Own program is expected to be proposed soon in the Senate Banking Committee. Action on such legislation in the committee by Memorial Day is possible, lobbyists here say.

(The Write Your Own program, launched in 1983, is a cooperative undertaking between the insurance industry and the Federal Insurance Administration, in which approved property-casualty carriers write and service the government's standard flood insurance policy in their own names, operating within the context of the NFIP.)

Mr. Symington said agents will also tell their representatives that “natural disaster risk is a national problem that deserves a national solution, as there is little doubt this is a huge problem for many consumers across the country.”

He said IIABA is “flexible” on a federal legislative solution as long as it works for the marketplace and leads to more insurance coverage in catastrophe-prone areas.

Turning to man-made catastrophes, he said that while Congress should be congratulated for passing an extension of the Terrorism Risk Insurance Act, providing carriers with a high-level reinsurance backup, “terrorism risk is also not an exposure that the insurance marketplace can handle on its own,” making a longer-term public/private partnership necessary.

Another issue will be the IIABA's strong support for H.R. 4960, the Tax Fairness for Small Business Act, which would help small businesses (such as independent insurance agencies) by modernizing the depreciation schedule for intangible assets to better reflect their useful economic life, according to Mr. Symington.

“A more accurate depreciation schedule would act as an incentive for small businesses to reinvest in their business,” he said. The bill was introduced in the House by Chief Deputy Majority Whip Eric Cantor, R-Va., and Rep. Earl Pomeroy, D-N.D.

Crop insurance is another top legislative priority for the insurance agents' industry, said Mr. Symington, noting that agents “will be making the case that the premium reduction plan is the wrong way for the crop insurance program to go, and we will once again be calling for a funding limitation to PRPs.”

Special Reports /

Agents Storm D.C. With Full Agenda

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