With Election Day just three weeks away, Republican candidates are leading Democrats in industry campaign donations, receiving roughly 67% of all contributions handed out by the insurance community up to this point in the 2012 election cycle, according to a Best's News Service analysis of data collected by the Center for Responsive Politics and the U.S. Federal Election Commission.
The outsized support shown for Republican candidates this year follows a trend that has dominated the industry's political donations for the past two decades.
The Center for Responsive Politics data show that not since 1990 have industry donations to Republicans dipped below 50%. Republicans received more than 55% of total industry donations during the past five election cycles. And at this point of the 2004, 2006 and 2012 election cycles, industry donations to GOP candidates exceeded 65%.
In interviews with Best's News Service, industry experts maintained that campaign donations generally follow a candidate's stance on issues and not his or her party affiliation. But data from recent election years show that industry contributions favor Republicans far more than Democrats.
"That's not altogether surprising, given the emphasis Republicans have placed on small business. Those are issues the industry follows closely," said Tom Litjen, vice president of government relations for the Property Casualty Insurers Association of America. PCI has adhered to the Republican-leaning trend during the latest two-year election cycle, donating roughly $391,000 to Republican candidates 59% of the $662,250 the organization has contributed this cycle.
Donations to this year's presidential candidates continue to heavily favor Republican presidential candidate Mitt Romney over President Barack Obama, a Democrat. The former Massachusetts governor's campaign saw $3.1 million in industry contributions nearly triple the $1.2 million donated to the Democratic president's campaign.
Beyond the presidential contest, the industry's monetary support of Republican congressional candidates also far outstripped what Democrats received, often by significant margins. Republican candidates received $27.8 million from the industry. Democrats were given less than half that amount, earning just $13.8 million. Total industry donations through August 2012 topped $44.1 million, including the $2.5 million the industry donated to outside spending groups.
Industry observers said this year's swing toward Republicans may be driven by Obama's Democrat-backed push to enact two laws that will significantly affect the industry.
Hundreds of regulations must still be written before insurers can gauge the ultimate impact of the Dodd-Frank Wall Street reform bill of 2010 and the Affordable Care Act, leaving insurers and regulators with little clarity about what to expect going forward. Romney and other Republican candidates have made repealing those laws, whether partially or entirely, the centerpiece of their campaign platforms.
The lack of specifics on how to implement the ACA prompted Pennsylvania Insurance Commissioner Michael Consedine to criticize the U.S. Department of Health and Human Services. Consedine said during a congressional hearing that the agency has failed to provide state regulators with direction on ACA-mandated health insurance exchanges, which could adversely affect policyholders and insurance markets across the country (Best's News Service, Sept. 19, 2012).
U.S. Sen. Orrin Hatch, R-Utah, the top Republican on the Senate Finance Committee and an industry favorite, echoed those complaints in a recent letter to HHS. Hatch told the agency that without more information, states cannot make educated decisions as they implement the health insurance reform law (Best's News Service, Sept. 27, 2012).
The Dodd-Frank Act has drawn similar fire. In September, for example, the U.S. Government Accountability Office, the federal government's watchdog agency, called on the Financial Stability Oversight Council to be more transparent about its procedure for evaluating potential risks to the U.S. financial system. GAO also said FSOC failed to develop a "comprehensive" process for assessing systemically risky non-bank financial entities (Best's News Service, Sept. 17, 2012).
"From a financial service standpoint, questions about how Dodd-Frank will be implemented are tremendously important. We have paid close attention to how members have voted on these issues," said Diane Boyle, vice president of federal government relations for the National Association of Insurance and Financial Advisors.
One aspect of Dodd-Frank that Boyle said NAIFA is following is how the U.S. Securities and Exchange Commission defines "fiduciary" versus a new definition under consideration by the U.S. Labor Department. The two definitions conflict, which Boyle said added to the uncertainty NAIFA members face.
Boyle said NAIFA doesn't focus on party affiliation when deciding which candidates to support. But 59% of the $1 million NAIFA contributed this election cycle went to GOP candidates. That said, of the 26 candidates NAIFA has sent donations of $10,000 or more, 13 are Democrats and 13 are Republicans.
The Independent Insurance Agents and Brokers of America has shown a strong penchant for backing Republicans. Of the $1.2 million it has handed out, 77% has gone to Republicans. Nathan Riedel, vice president of political affairs for IIABA, said, "At the end of the day, our PAC is trying to support Main Street America and small business."
Whit Cornman, a spokesman for the American Council of Life Insurers, acknowledged in an email that ACLI's political action committee also tends to tilt toward Republicans, which he said "generally mirrors the make up of Congress." Republican candidates received 53% of the $321,630 ACLI donated to individual campaigns. Between both chambers of Congress, the GOP holds a combined 54% majority.
Other top industry donors include New York Life Insurance ($2.1 million donated, 56% to Republicans); the Blue Cross/Blue Shield Association and its member companies ($1.8 million donated, 66% to Republicans); Aflac Inc. ($1.6 million donated, 59% to Republicans); and USAA ($1.2 million donated, 74% to Republicans). However, American Financial Group was a notable outlier among the top-five insurance industry donors. The company sent just 46% of the $1.6 million it has donated to Republicans.
Not surprisingly, given their influential positions, top congressional leaders have received strong industry support. House Speaker John Boehner, R-Ohio; House Majority Leader, Eric Cantor, R-Va.; and Senate Minority Leader Mitch McConnell, R-Ky., were among the top recipients of industry funds. Boehner and Cantor face easy re-election bids in November. McConnell will be up for re-election in 2014.
But again, Democratic leaders like Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., received far less than their Republican colleagues. While Boehner, Cantor and McConnell are among the insurance industry's financial favorites in their respective chambers, Pelosi and Reid aren't even among the top half of industry donation recipients.
Republican candidates also benefitted from industry contributions in several key and very tight congressional races.
In Massachusetts, industry favorite U.S. Sen. Scott Brown, R-Mass., is locked in a closely watched battle with Democrat Elizabeth Warren, a former Harvard law professor who was Obama's original pick to head the U.S. Consumer Financial Protection Bureau. Obama ultimately withdrew Warren's name after it became clear she wouldn't gain Senate approval.
The industry overwhelmingly supported Brown, making him the top recipient of industry donations among Senate candidates. To date, Brown has received approximately $500,000. Industry donors have given Warren the far smaller sum of $44,425.
In the House, industry donations were astonishingly lopsided in the too-close-to-call contest between Rep. Judy Biggert, R-Ill., who chairs the chamber's subcommittee oversees insurance issues, and her opponent Democrat Bill Foster. Biggert's insurance industry donations have swelled to $237,250. Foster's sit at $7,000.
But the insurance industry has also thrown its financial weight behind a number of Democrats facing fierce election contests.
U.S. Sen. Jon Tester, D-Mont. earned $172,194 from the industry, while U.S. Rep. Dennis Rehberg, R-Mont., lagged far behind that amount, receiving just $72,450. The Rehberg-Tester race is so tight that many political analysts said they expected the result to be determined after Election Day.
"We have come out strongly in favor of Sen. Tester. He has proven himself to be a very good friend of the business community," IIABA's Riedel said.
The Center for Responsive Politics did not have industry-specific figures for September and October. But industry experts said they expected donations from the insurance sector to continue as the Nov. 6 election draws near, meaning Republican candidates may see even more industry support in the coming weeks.