Posted on 20 Dec 2010
Working with regulators on implementation of the Dodd-Frank Act will be the top federal priority in 2011 for the Property Casualty Insurers Association of America (PCI). In addition, PCI will work on a number of other key initiatives including the extension of the National Flood Insurance Program (NFIP), promotion of competitive crash parts legislation and preservation of the McCarran-Ferguson Act.
At the federal level, the divided Congress could lead to even greater gridlock in 2011. Senator Chris Dodd’s retirement and the Republican takeover of the House have both led to major changes in committee leadership that will directly impact the agenda for the financial services sectors in the 112th Congress. “PCI will be both at the front lines on Capitol Hill acting on priority legislation for insurers and at the table with regulators to implement the Dodd-Frank Act,” said Ben McKay, senior vice president of federal government relations for PCI.
Financial Services Regulatory Reform
Following the passage of the Dodd-Frank Act, PCI remains focused on regulatory implementation and rule-making, including deliberations over the creation of the Federal Insurance Office and the Financial Stability Oversight Council’s methodology for determining systemically important companies.
“We want to preserve the legislative intent of the Dodd-Frank Act, as it appropriately distinguishes insurance as very different from other financial sectors and recognizes the strong consumer protections provided by the state regulatory system,” said McKay. “Our goal is to keep home, auto and business insurers from being negatively impacted by new systemic risk or derivatives rules.”
National Flood Insurance Program
“While we are pleased that Congress passed a one-year extension for the NFIP, PCI will be working with lawmakers throughout the year to prevent another expiration,” said McKay. The NFIP expired four times in 2010 before being extended on September 30, creating widespread confusion and anxiety for consumers, insurers and the real estate marketplace. In 2011, as Americans face an anemic economic recovery, PCI will advocate for greater certainty and stability for the NFIP, including a long-term extension and balanced reforms.
Competitive Crash Parts
PCI is an active member of the Quality Parts Coalition - working to preserve consumer choice and competition in the automotive aftermarket - and a major supporter of the “Access to Repair Parts Act” legislation sponsored by Representative Zoe Lofgren. “We are pleased that the House Judiciary Committee heard this bill in 2010 and will work with leaders on both sides to place this legislation on the 2011 agenda,” said McKay.
“At the beginning of 2010, our sector achieved a major victory by blocking several legislative proposals to repeal the limited federal antitrust delegation under the McCarran-Ferguson Act,” said McKay. PCI also secured a colloquy on the House Floor to reinforce that medical professional liability insurers were not included in the health care proposals. However, in 2011, PCI will remain vigilant and prepared for additional legislative threats to McCarran-Ferguson.
In 2010, PCI hosted the first Global Issues Financial Seminar in Washington, D.C. for top insurance executives. Joined by state regulators, the event provided a robust discussion on the latest international accounting and solvency regulation issues that will affect the bottom lines of U.S. insurers. In 2011, PCI will continue to lead this important debate and represent the industry at key international forums.
“As we witness the ever-increasing globalization of the capital and insurance markets, the pressures of international developments in financial regulation on U.S. insurers and regulators have never been greater,” said McKay. “The international and U.S. industry will watch with great interest as European Union regulators make the final changes in Solvency II, the EU's new insurance financial regulatory system.”
“While 2010 was both an incredibly challenging and productive year for home, auto and business insurers, the New Year will present both new threats and opportunities to our sector,” said McKay. “PCI remains strong and well-equipped to lead the industry. We will present continued thought leadership, multifaceted strategy and compelling advocacy on important issues across the country to promote the viability of a competitive private insurance marketplace for the benefit of consumers and our members.”