Terrorism Bill Still On Track Despite Election Day Upheaval

However, he added, the reality is that if the legislation dies this year, Congress will have to start from scratch in 2003. That, according to Mr. Rusbuldt, means it could take six months or more to get a bill through. There is a chance to move legislation now, during the upcoming lame duck session, he said, adding that he believes Congress will act.

Monte Ward, vice president of federal affairs for the National Association of Mutual Insurance Companies in Indianapolis, agrees there is a good possibility that some Republicans will try to delay the bill. However, if they wait until next year, he noted, they will still have to negotiate with Senate Democrats on the tort provisions, since 60 votes are needed to cut off debate on a measure–called "invoking cloture."

Carl Parks, senior vice president of federal government affairs for the National Association of Independent Insurers in Des Plaines, Ill., added that it is important to look at the role President Bush played in the election and the impact he had on the results. The President has identified terrorism insurance as perhaps his number one domestic security issue, Mr. Parks said, and he does not think that Republicans will try to deny him that success.

Gary Karr, a representative of the Washington-based American Insurance Association, added that both President Bush and Senate Republican Leader Trent Lott, R-Miss., have spoken up since the election and insisted that the terrorism insurance bill should get done.

"President Bush is committed to this bill," added David Farmer, senior vice president of federal affairs for the Alliance of American Insurers in Downers Grove, Ill. "The change in the Senate should not have an impact on the issue."

But Joel Wood, senior vice president of government affairs for the Washington-based Council of Insurance Agents and Brokers, noted that control of the Senate will actually change fairly quickly.

Due to the nature of the special election in Missouri, in which Republican Jim Talent won the Senate seat from the Democratic incumbent Jean Carnahan, Sen.-elect Talent will take his seat as soon as his election is certified, he said. When that happens, control of the Senate will shift to Republicans.

This, Mr. Wood said, could encourage Democrats to try to wrap up the session quickly, possibly damaging prospects for the terrorism bill.

Nonetheless, he said, he believes that if the White House indicates to Republican leaders that it wants the bill enacted, there is a strong likelihood of success.

Looking ahead to the next Congress, industry representatives expect civil justice reform to be a major issue. AIA's Mr. Karr said that with Republicans in control of both chambers, it will be easier to get medical malpractice reform, asbestos litigation reform, and class-action reform on the agenda.

Asbestos litigation reform, he noted, would have been a major issue even if the Democrats had held on to the Senate, but the chances are now enhanced.

Nonetheless, Mr. Karr said, it will still be necessary to put together a bipartisan coalition to get any reform legislation passed by Congress and sent to the President.

Mr. Farmer agreed with Mr. Ward that while the change in leadership and the Senate committee structure will put the tort reform issues on the agenda, there is not a 60-vote margin to assure smooth sailing for any Republican-supported bill. "Despite the change in leadership, the Democrats clearly can be effective in opposing legislation," he said.

Turning to taxes, insurance agents see an opportunity to move two important issues. One is estate tax repeal, Mr. Rusbuldt said.

One of the major goals of Republicans in the next Congress will be to make permanent the temporary tax cuts that were approved last year. Under current law, the estate tax will phase out on Jan. 1, 2010. However, because of a sunset provision in last years legislation, the estate tax will come back into being, exactly as it existed in the year 2000, on Jan. 1, 2011. Permanent repeal of the estate tax is a major issue for independent agents, Mr. Rusbuldt noted, because of the impact the estate tax has on agency perpetuation.

Maria Berthoud, IIABAs senior vice president of government affairs, added that another priority for agents in the next Congress will be accelerating the amortization of intangible assets, such as expirations. The Treasury Department is working on a major reform of the nations tax code, and corporate taxation will likely be part of the package. She said that accelerating the amortization schedule will be agents top issue.

Mr. Parks added that this will be a major issue for NAII as well, and noted that he has already met with Treasury Department officials to discuss it. He declined to identify specific property-casualty issues, since the discussion is still in its earliest stages. But he said NAII is very interested in the process.

One issue that could cause concern for insurers is privacy. The new chairman of the Senate Banking Committee will be Sen. Richard Shelby, R-Ala., who is a strong privacy advocate. He supports legislation that would require financial institutions to obtain the affirmative assent of customers before sharing their personal financial information with other parties.

Ms. Berthoud said that Sen. Shelby could make things very difficult for the insurance industry. IIABA, she said, will try to work closely with him to explain agents privacy concerns.

Mr. Karr said that AIA would wait to see what Sen. Shelby does. "We will take it as it comes," he said.

As for optional federal chartering of insurance companies, Ms. Berthoud said she believes the change in the Senate is important. Republicans, she said, usually have a knee-jerk reaction against any federal regulation. This, she said, is helpful to IIABAs position in favor of regulatory reform without creating a new bureaucracy.

Mr. Farmer of the Alliance said he does not think the change in the Senate will affect the chartering issue that much at this stage. He noted that most of the action has been on the House side, and the House Financial Services Committees oversight hearings on state regulation will continue.

Mr. Wood of the Council agreed. Indeed, he said, neither Sen. Shelby nor outgoing Senate Banking Committee Chairman Paul Sarbanes, D-Md., has demonstrated a strong interest in federal insurance legislation.

As for health reform and a patients bill of rights, Mr. Wood said that the effort would probably be considered dead right now but for declarations from the White House that it supports reform of HMOs. However, he noted, the White House supports far different types of reforms than Democratic leaders such as Sen. Ted Kennedy, D-Mass.

The change in the Senate means there probably will be less pressure for new healthcare mandates and more incentives for employer-provided coverage, Mr. Wood said, but predicted that because of the close margins, there probably will not be sweeping benefit initiatives.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, November 11, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.