WASHINGTON–The National Association of Professional Insurance Agents leadership plans to warn the group about changes and restrictions for their industry they see being pushed by all branches of government.
The presentation, by Len Brevik, PIA chief executive officer, is slated for April 1, several days after PIA members from around the country will converge in Washington, D.C., for the association's 25th annual Federal Legislative Summit.
Mr. Brevik has prepared remarks for that session warning, "There has been a significant deterioration of the insurance industry's standing in the past six months."
His caution is not about quarterly financial reports, "which, for many carriers, have never looked better," according to his text.
Instead, said Mr. Brevik, new challenges "are all coming at us at the same time in the legislative, regulatory and judicial arenas–all branches of government."
Mr. Brevik explains that advocates for federal regulation of insurance are taking advantage of public discontent resulting from some claims practices following Hurricane Katrina, leading some in Congress to hold hearings and propose legislation.
He says two bills are of the most concern to PIA: One would repeal the McCarran-Ferguson limited antitrust exemption for the insurance industry, and the other would create federal regulation under a so-called "optional" federal charter.
"All this is happening at the same time several state attorneys general continue their attempt to legislate how our industry operates by judicial fiat," Brevik plans to say.
"They are using a few settlement agreements to try to ban contingent commissions industry-wide and impose legally flawed disclosure requirements that would create compliance problems for independent insurance agents," he adds.
Mr. Brevik says these challenges are requiring PIA to fight on several fronts simultaneously, opposing federal regulation in Congress while defending contingent commissions in court and with state insurance departments.
"The McCarran repeal proposal is very dangerous because it would effectively negate Congress' 1945 designation of the states as regulators of the business of insurance," Brevik said.
"This would throw all disputes between overlapping state and federal systems into the courts. It is a blueprint for chaos in the insurance marketplace," he says.
Mr. Brevik also observes that it is "interesting to see some of the advocates of optional federal charters in a quandary about McCarran."
"At first, some of them wanted to get Congress to pair a repeal of McCarran with the passage of an optional federal charter, but they quickly changed their strategy when they realized the extent of the damage a repeal of McCarran would do to the industry," he plans to say.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.