Passing legislation might be the last thing on the minds of members of Congress as they return to work this week after a month-long recess, eager as they are to race home as soon as possible in an intense effort to persuade the voters to send them back to Washington, D.C.
That means action could be delayed on the priority issues for the property-casualty insurance industry–led by legislation providing more funds and reforming the National Flood Insurance Program.
Indeed, there is already talk about a delay until a lame duck session likely to be convened in mid-November–or, as some speculate, until next year, when at least one house of Congress might be run by Democrats.
The fact that polls show voters are unhappy with incumbents means that Congress is unlikely to work more than 10-to-12 days in September, and will hold as fast as possible to the planned Sept. 29 recess date, according to industry lobbyists.
Besides the NFIP, other p-c industry issues possibly on the agenda include another hearing before the Senate Banking Committee on insurance regulatory issues, as well as action on legislation that simplifies state oversight of multistate surplus lines and reinsurance.
There is also the potential that Rep. Richard Baker, R-La.–chairman of the Capital Markets Subcommittee of the House Financial Services Committee–will hold a hearing on the availability of insurance in the Gulf states in the wake of Hurricanes Katrina and Rita, but nothing has been firmed up yet, lobbyists said.
Indeed, Rep. Baker has at one point indicated that he wants to review the entire issue of planning for natural catastrophes.
"Nothing is certain, but there is every evidence that House passage of the surplus lines bill can and will be achieved this year," according to Joel Wood, senior vice president of government affairs at the Council of Insurance Agents and Brokers, noting a consensus with the House Financial Services Committee, which passed the bill by voice vote.
Mr. Wood conceded there are few legislative days left to deal with the bill on the House floor, and that the House Judiciary Committee shares jurisdiction on the issue. "But we feel that Rep. Richard Baker has achieved what he set out to do–demonstrate that this is the 'lowest hanging fruit' of regulatory reform that is desperately needed," he said.
Mr. Wood noted that the Senate Banking Committee has only recently begun a series of inquiries into insurance regulation, "and it may well be that there is not time this year for them to act on the legislation."
However, he added, "we're lobbying in a friendly but assertive way to keep the prospects open for enactment this year."
If not this year, "whenever any insurance regulatory reform moves, we think that there is a very good chance this legislation will be a part of it," Mr. Wood said. "Perhaps the most pleasing surprise has been that the state regulators have to date been very constructive in their views regarding this legislation, which bodes well for these specific provisions over time."
Justin Roth, a senior director of federal affairs at the National Association of Mutual Insurance Companies, said action on the flood insurance reform bill will be delayed due to the tight calendar. In addition, officials of the Federal Emergency Management Agency have indicated to Congress that loan authority and cash on hand appear adequate to keep the NFIP program funded until at least the end of the year. "That removes the time-sensitivity," he said.
A House flood insurance reform bill has passed and is awaiting action in the Senate. A different version of the bill was passed by the Senate Banking Committee in July and is awaiting floor action.
The House bill has some additional coverage that the Senate "is not necessarily keen on," Mr. Roth said, including increases in maximum coverage limits and business interruption payments–provisions not included in the Senate bill.
He said members of the Senate are taking a stronger stand on reducing government subsidies to the NFIP, "so they have some concerns about the House bill."
Another issue of concern is a provision in the Senate bill mandating increases in mandatory coverage areas. This would require owners of property located behind man-made structures, such as levies and dams, to have flood insurance.
Mr. Roth said NAMIC is lobbying for additional borrowing authority for NFIP to ensure that all claims are paid. Currently, the program's borrowing authority is capped at $21.8 billion–NFIP administrators want this increased to $25 billion.
"NAMIC's position is that it wants funds there to ensure that claims are paid in a timely manner," Mr. Roth said.
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