From a fiscal-cliff deal in January that provided certainty toestate-tax policy, to the release of a long-awaited FederalInsurance Office report in December that seeks to shape theconversation on insurance regulation into the future, events inWashington heavily influenced the insurance industry throughout2013. 

In the New Year, the industry will have its eye on a number ofkey Washington battles, both new and old, that will impact insurersand producers.

Click "next" to see the top five Washington issuesexpected to impact the insurance industry in 2014

Renewing TRIA

An Amtrak police K-9 unit patrolsNew York's Penn Station. (AP Photo/Bebeto Matthews)

Reauthorization of the Terrorism Risk Insurance Act in some formwill be the top priority of the property and casualty insuranceindustry. Industry hopes that legislation extending the programbeyond its current Dec. 31, 2014 sunset would be in place by theend of this year were dashed by strong opposition fromconservatives in and out of Congress who argue that that theprogram is becoming just another entitlement.

Congress was told that insurance contracts are annual deals,renewal efforts for policies going into 2015 were underway, andthat delay would create great uncertainty, but the effortfailed.

Now, the House Financial Services Committee has agreed to reviewthe issue starting in March. Its leadership has demanded thatgovernment liability be reduced and the industry have "more skin inthe game," but the panel has agreed that it will support renewal insome form. 

Support in the Senate is bipartisan and, before they left forhome late this month, several senators asked the Senate BankingCommittee to move quickly on the issue in 2014.

To Delay or Not Delay: NFIP Rate Increases

(AP Photo/Alex Brandon)

A National Flood Insurance Program with a stronger balance sheetseemed in the cards when Congress passed legislation in July 2012phasing in actuarial rates over four years. However, the bill hasgenerated fierce opposition from homeowners across the country, aswell as from the politically powerful real estate industry.

Up to now, Congress, by action and inaction, seems to haveindicated it doesn't want to get involved unless it is as a lastresort.

But the Senate did agree Thursday to take up legislation earlynext year that would delay or modify most parts of the 2012legislation.

However, there is also an alternative proposal is likely to getstrong consideration. It would be more targeted because ofconcerns, especially among Republicans, that the Senate bill headedto the floor effectively junks the 2012 legislation.

Another avenue for delaying the NFIP rate increases is through acourt case seeking an injunction against all rate hikes unless theFederal Emergency Management Agency justifies the action asaffordable. The Federal District Court in Gulfport, Miss. couldrule before the end of the year.

This is creating a major headache for the 84 Write-Your-Ownpersonal lines insurance carriers. They say that any action todelay the rate hikes would have a profound effect because it wouldtake months for FEMA to interpret the new legislation and provideguidance to WYOs, raising questions as to what would happen to thepremiums that were adjusted in October to comply with the 2012law.

WYOs also want to know who will compensate them or their vendorsfor the millions of dollars in costs associated with re-ratingmillions of policies and then undoing and redoing them.

Tax Treatment of Offshore Insurers

(AP Photo)

Action by the Senate Finance Committee proposing changes in taxlaws governing the treatment afforded to offshore insurers doingbusiness in the U.S. in November may be just a first step towardshifting the burden on the ceding of premiums in reinsurancetransactions in favor of domestic carriers.

The proposal in principal has support in a key House committeethat is also considering ways of simplifying U.S. tax policy,adding greater weight to an idea that has been around in one oranother for perhaps a decade.

Offshore insurers have their supporters in Congress as well, andcontrol of the Senate could shift to the Republicans in the fallelection, which may tip the scales in the offshore insurers' favor.However, action by the Senate Finance panel could be a signal thatCongress is serious about dealing with this issue, to theconsternation of offshore insurers.

Obamacare

President Barack Obama speaksduring an election night party in Chicago. (AP Photo/MattRourke)

Getting "Obamacare" off the front pages is Job No. 1 for theObama administration, and especially Health and Human ServicesSecretary Kathleen Sebelius.

The rocky rollout of the federal healthcare exchange has thepotential to be the Waterloo for President Barack Obama. Gettingthe balky website to work would put the president's domestic agendaback on track. It would also provide the certainty health-insurancecarriers and agents so crave as the lynchpin for sale of theirproducts.

Federal Vs. State Regulation

Janet Yellen

The comfortable ride that Janet Yellen received through theSenate confirmation process as the first woman chairman of theFederal Reserve Board should send a strong signal to the insuranceindustry that Congress finds acceptable "having another pair ofeyes"—especially one with the quantitative expertise of theFed—looking over the shoulders of state regulators.

While state regulators will visit Washington regularly to getreassurance about their primary role in insurance oversight, theYellen process reflects the equilibrium that now exists inWashington over insurance regulation. That equilibrium is offederal agencies providing political cover to elected officialsfeeling heat from anxious insurance carriers and agents deeplyconcerned about a federal takeover of insurance regulation.

That will not stop members of Congress from constantly bringingup the issue however; there will be regular hearings as nervousmembers continue to reassure industry officials and stateregulators that they are on their side.

At the same time, there is currently only limited politicalsupport for federal oversight of insurance, and those who dosupport it are not going to raise their hand if the question isasked.

The Yellen confirmation process, though, shows that the returnto the old days of a cordon sanitaire between the federalgovernment and state-insurance regulation is over. Measured federalinvolvement through a process laid out through the Dodd-Frank Actis not going to be disturbed, and the Fed's setting up a system tomeasure insurance industry financial performance will be encouragedand supported.