The chief executive officer of the Property Casualty InsurersAssociation of America warned his members last week to beware of a"divide and conquer" strategy in Washington when it comes tonailing down regulatory and health care reform.

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David A. Sampson, CEO and president of PCI, said his concern isthat in dealing with federal lawmakers and the White House,"industries will be cutting their own best deals and throwing theother guy under the bus."

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Interviewed by NationalUnderwriter prior to his speech last week in Orlando at PCI'sannual meeting, Mr. Sampson said the debate over health care reformhas pitted doctors, pharmaceutical companies and insurers againstone another, just as those lobbying to shape energy legislationhave seen nuclear, renewable and other energy sectors "trying tocut their best deal regardless of what that means. We're going toguard against that in the property and casualty industry."

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Mr. Sampson said PCI is well financed to pursue its politicalaims, noting that his group's plan is for its political actioncommittee to raise $1 million for the 2009-2010 election cycle. Forthis year, he said PCI's fundraising goal is $480,000, and "we'vealready got in $436,000.

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So far in Washington this year, according to Mr. Sampson, theinsurance industry has headed off additional onerous regulation forinsurers in proposed financial services regulatory reformlegislation and consumer protection measures. "I think we've beensuccessful in making a compelling case that the property andcasualty industry did not cause the financial meltdown," hesaid.

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He added that PCI representatives have pointed out that over thepast five years the industry has handled the avalanche ofadditional claims from events such as Hurricanes Katrina and Rita,in addition to processing its normal business, "without having toask for a bailout. We've been laying out that data to Congress…Wehave a compelling story to tell."

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The PCI, said Mr. Sampson, has been very encouraged by "how openand responsive Congress and the [Obama] administration have been toour data."

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"The first reason is that underwriting is our core competence,"he noted, adding that the industry has not engaged in large-scalesecuritization of its exposures, is not highly leveraged, and hasinvestment portfolios that are tightly regulated at the statelevel.

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"All those factors allow us to perform as economic crises comeand go," he told NU.

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Mr. Sampson said he will alert members to other risks, includinga recovery likely to be marked by slow growth for a long period.Companies, he said, are going to remain on the sidelines and notengage in rehiring "until they have more confidence that thiseconomy is for real," hampering the economic recovery and dampeningthe expansion of insurable exposures.

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He also foresees that massive government deficits will lead toinflation–of keen concern to p&c company CEOs because it willmean high repair costs for autos and homes in an environment whererate increases will be difficult to obtain, as was the case duringthe inflationary period of the 1970s.

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Additionally, Mr. Sampson said he has concerns that efforts willbe made to undermine the private insurance markets, as exemplifiedby moves to create a government-run public option for healthinsurance that could "crowd out" private insurers. That effort, hesaid, could spill over into the p&c sector.

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