No industry wants to hear the words more federal scrutiny, but with well-documented problems among some of the nation's leading carriers, the insurance industry is facing exactly such a prospect in 2009. Insurers always have been regulated by the states–and even the staunchest proponents of a federal charter for the industry don't believe that's going away–but with a new Congress to be seated and a new president to be inaugurated, the industry can't escape the withering glare of Big Government.

More compliance and regulatory demands will be headed the industry's way and carriers will need to react, agrees Michael Costonis, director of Accenture's insurance practice in North America. "We'll see a reprioritization and potentially the addition of a whole slew of initiatives around compliance and around regulation," he says.

The economy and the insurance market might not make this the best time for various types of investment, but when it comes to compliance and governance issues, Costonis states there is no debate. "The insurance industry will be in a position where it's just not optional to open up the budget, expand the resource pool, and address the needs that will be out there around regulation," he says.

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