Posted on 08 Jan 2009
According to the Property Casualty Insurers Association of America (PCI), three dominant challenges confront the property casualty insurance industry on the federal level in 2009. These challenges include impending financial services regulatory reform, a fundamentally changed political environment, and a severe economic crisis.
“We expect 2009 to be a very challenging year, and we are positioned to meet those challenges,” said David A. Sampson, PCI’s president and CEO. “The insurance industry has a long history of working with policymakers from both major political parties, and we look forward to working with the Obama Administration and the 111th Congress.”
Regulatory reform is expected to be the leading issue facing the industry, with the fallout from the economic crisis driving these reforms. Additionally, the debate over financial services regulation continues to shift from state vs. federal to national vs. international. These drivers clearly presage greatly enhanced federal involvement in the insurance industry.
“While insurance has fared better relative to other segments of the financial services sector, the fallout from the financial crisis will not bypass the property casualty insurance industry,” Sampson said. “The new Administration and financial services leaders of both parties in the House and Senate have clearly signaled that comprehensive federal reforms are likely to be enacted in 2009. We believe the industry must collaborate and come to the table with constructive ideas on regulatory reform if we want to avoid duplicative, hostile regulation and focus lawmakers on good regulatory principles.”
To that end, PCI’s Board of Governors has created a special Board Committee on Financial Services Regulatory Reform which will be positioned to provide immediate response and feedback to Congress. PCI staff will also be working with Congress and the new Administration to help ensure consideration of impacts on insurance consumers.
“As President-elect Obama and Congress look to navigate through the complexities of the financial crisis and regulatory reform, it is vital that the insurance industry is available to provide technical expertise and insight, and to offer constructive ideas and suggestions,” Sampson said. “We at PCI will work with the administration and Congress in any way we can.”
Additionally, PCI will work to reauthorize the National Flood Insurance Program (NFIP), which Congress extended on a short-term basis last September. The extension is set to expire March 6th. Other issues expected to remain prominent on the federal level include natural catastrophe legislation and continued debate over the use of credit based insurance scoring.
“Clearly we have a full plate in 2009,” Sampson said. “All segments of our industry must work together in ways we have not done before to educate policymakers and staff on the vital role of our industry, the strength of our products and policies, the strict solvency regulations that are already in place, and the contributions we make to the success of the American economy. We intend to be engaged and innovative, and to meet all the challenges that 2009 may bring.”
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $198 billion in annual premium, 40.5 percent of the nation’s property casualty insurance. Member companies write 51.6 percent of the U.S. automobile insurance market, 39.7 percent of the homeowners market, 33.2 percent of the commercial property and liability market, and 38.7 percent of the private workers compensation market.