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A takeover in the House of Representatives by Democrats wasn’t the dramatic change in Congress leadership that some expected following the midterm elections in the US, particularly as Republicans held on to the Senate. At the same time, the elections results won’t signal dramatic shifts to a few key insurance-related issues that are coming up on the Congress docket for the coming year, according to industry experts.
“Insurance issues by their nature have not been partisan issues,” said Nat Wienecke, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI), a sentiment that was echoed by the American Insurance Association (AIA), whose vice president of public affairs Maggie Seidel told Insurance Business, “The AIA’s work on behalf of its members and their policyholders has always been – and will continue to be – bipartisan. We look forward to continuing to work with House Democrats and Republicans on a number of important P&C issues in the new Congress.”
Take, for example, the reauthorization of the National Flood Insurance Program (NFIP), which is due on November 30 and provides an opportunity for Congress to reform a program that has seen its share of losses this year following Hurricane Florence.
“I do not believe that [the election] changes what’s going to occur relative to the NFIP reauthorization. If the Senate had changed hands, it would have the potential to change things,” explained Craig Poulton, CEO of private flood insurer Poulton Associates. After all, the House passed the 21st Century Flood Reform Act, which included important reforms to address the NFIP’s financial struggles and clarified that property owners in flood zones can turn to the private market to meet the federal lending requirement. The Senate, on the other hand, did not advance this issue.
“The House has been willing to take action. The House had discussed and had come up with a set of reauthorization criteria that they were ready to act on and again, the Senate said, don’t pass the bill yet, let us look at it, and they just continue to keep it stalled,” explained Poulton. “Even though Democrats are in charge of the House, most of them had already looked at this issue and said, here are the kind of reforms we need to do, so if they see any light at the end of the Senate tunnel, I would expect the House to be willing to do something along the lines of what they’ve previously proposed. It’s really the Senate where the bottleneck is, and it’s more geographic than it is political.”
With Representative Maxine Waters from California expected to head the Financial Services Committee, Wienecke predicts she’ll pass a flood insurance bill next year, though that’s not the main concern.
“The question is, can the Senate find 60 votes and what does that compromise look like, and that challenge doesn’t change as a result of the election,” said Wienecke.
The National Association of Professional Insurance Agents (PIA) meanwhile sees benefits from the election results when it comes to the reauthorization of the NFIP and the future of the flood insurance market.
“PIA supports a long-term reauthorization of the flood insurance program, with needed reforms. Since we also support efforts to encourage the development of the private flood insurance market, the expanded Republican majority in the Senate could present a good opportunity for the entry of additional private flood resources into the marketplace,” said Jon Gentile, vice president of government relations of the PIA. “We hope these changes to the composition of Congress will encourage a renewed spirit of bipartisanship in terms of creating opportunities for insurance agents to expand their businesses and increase the take-up rate for flood and other essential lines of insurance.”
Where Wienecke sees an arguably better environment for the insurance industry as a result of the elections is in the Terrorism Risk Insurance Program, which via the Terrorism Risk Insurance Act formed a temporary federal program that created for a transparent system of shared public and private compensation for some insured losses resulting from a certified act of terrorism, according to the US Department of the Treasury. Waters has proposed a permanent straight reauthorization of the program, which will likely not be the end result, but still reflects a good starting point for a conversation on its extension, said Wienecke.
On the other hand, challenges to the insurance industry could emerge when Congress debates topics whose impacts could seep into the insurance realm.
“I have a reasonably high degree of confidence that one of the major issues that will come up in this Congress is the issue of consumer data privacy, and I would expect to see Congress discussing and debating with legislative solutions to consumer data privacy similar to the California legislation that passed or GDPR in Europe,” commented Wienecke. “With all the hearings that we’ve had with the social media companies this year, there was no bill or effort in this Congress to do that. That is almost impossible for me to see in the next Congress – I would be shocked if there weren’t legislation in the next Congress on consumer privacy.”
The role of the federal government in regulating or declassifying marijuana as a Schedule 1 drug could also be up for discussion and is an area where insurers have a concrete interest, particularly in areas of highway and workplace safety, added Wienecke.
While the work of the new Congress is only just beginning, there is some optimism that the future for the insurance industry will be bright under incoming leadership.
“While a lot has been accomplished under two years of singular control – including passage of tax reform, which led to many agents and brokers being able to qualify for a very helpful pass-through tax deduction – we now may see other positive actions as the result of this split Congress,” Gentile told Insurance Business.
