NEW YORK–Former regulator and trade association president Ernst Csiszar told property-casualty insurance executives gathered here today that their industry is a "cheapskate" when it comes to political expenditures.
Mr. Csiszar, who served as chief executive officer of the Property Casualty Insurers Association of America (PCI) and president of the National Association of Insurance Commissioners, made his remarks at the 18th Annual Property Casualty Conference.
He said the insurance industry has not made its presence felt in Washington primarily because it fails to make the political contributions that bring influence.
"The industry does a lousy job at playing politics," Mr. Csiszar said at the event sponsored by Ernst and Young and National Underwriter. "We are cheapskates in that we don't contribute where we should."
He noted that the PCI, which he resigned from abruptly in September, raised just $400,000 for its political action committee. "That is just petty cash when it comes to these matters," he said.
Texas State Rep. Craig Eiland, D-Galveston, a former president of the National Conference of Insurance Legislators, agreed with Mr. Csiszar, recalling one contribution of $250 from an insurance company.
He said jestingly that if they "were in this bad a shape," he felt he did not want to make their condition worse, adding, "So, I never cashed it. I still have it till this day."
Mr. Eiland stressed that with so much emphasis on national issues, it is worth remembering that critical insurance issues will be decided as well in statehouses next year.
In his Gulf Coast town of Galveston, property rates are the big issue, Mr. Eiland said, noting that State Farm has pulled out of that market, forcing many policyholders to find new companies.
Reinsurance costs have figured primarily in the rate hikes, Mr. Eiland said.
"Perhaps we should look at how those prices are set, or perhaps not let the insurers funnel those costs back to the policyholders since it was their choice," he said.
Also in that regard, he said, the individual states may have to deal with the issue of whether foreign reinsurers must post collateral if the NAIC fails to make any progress at its annual winter meeting next month.
If alien reinsurers have greater access to the U.S. market, Mr. Eiland said he feels that ultimately could help ease property prices. The NAIC is discussing a collateral proposal to install some sort of financial rating system for alien reinsurers.
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