Congressional passage of the surplus lines bill by the 111th Congress seems more likely in this session, but what form the bill will take remains a question, according to a Council of Insurance Agents & Brokers official.
"We are highly optimistic we will be able to pass the legislation," said Joel Wood, senior vice president of government affairs for the CIAB.
His comments came during a press conference yesterday to kick-off the CIAB's annual Legislative Leadership Summit that begins today in Washington, D.C., to discuss the political issues producers will be talking over with their Congressional representatives this week.
Mr. Wood said significant opposition to the bill has been removed in the House and he is confident the bill will resume its course through Congress, picking up from where it was last year when it passed the House but failed to make it out of committee hearings in the Senate.
The bill would establish home rule by the insurance regulator where the company is based over multistate surplus lines placements, making the collection of taxes and application of rules less burdensome to the industry.
However, in what form the final bill will take shape remains a question–whether it will be a stand alone piece of legislation or part of a broader regulator package, said Mr. Wood.
"You never know," he said. "You look for your opportunities [for passage]. We will take it any way you can get it, but it is a little early to project what the vehicle is going to be."
He said passage of the surplus lines bill is the "number one priority" of the CIAB and its members.
"We need to get it done and we have a good window," he said. "I hope it doesn't take the entire session of the 111th Congress, but we think it's a good shot."
Andrew G. Cassidy, chairman of the CIAB's government affairs committee and a principal at William Gallagher Associates, said it is expected that the surplus lines bill will be re-introduced in the House in the coming weeks.
On the issue of proposed optional federal charters for insurers, Markham R. McKnight, CIAB chairman and president of Bancorp South Insurance Services Inc., said the issue remains "up for grabs at the moment." He said the hope is the charter would become part of an overarching framework of regulatory reform.
Generally, the industry is gearing up for "most intense debate" on regulatory reform. While most of the industry has done well in the current economic crisis, there still remains general concern about the systemic risks to the industry and a determination of what those risks are could boost the argument for federal oversight.
"We believe the fragmented state-by-state regulatory structure is in need of reform," said Mr. McKnight.
"If the industry is hit with a major catastrophe that may well seal the deal," he said. He added, however, the issue of insurance regulation is not something that has "people losing sleep at night."
"Insurance should not be an afterthought in this upcoming debate," he noted.
Touching on the issue of health care reform, Christopher J. Nadeau, chairman of the CIAB's Employee Benefits Executives, said the focus will be on promoting a "more effective and efficient health system," and that the federal government will need to pay a key role in that reform. He said the issue promises to be a "huge debate" this year.
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