While lobbyists see few direct threats to the property/casualty insurance industry in the current Congress, P/C insurers have been advised to remain vigilant because several issues that could have a spillover effect on them.
Despite federal policymakers’ focus on the nation’s budget, P/C trade associations are monitoring several other issues that could affect their members, Thomas Litjen, vice president of federal affairs for the Property Casualty Insurers Association of America (PCI), told attendees at the American Association of Insurance Services (AAIS) Main Event conference in Ponte Vedra, Fla.
According to Litjen, these issues include, among others:
- The appointment of an insurance industry representative to the newly-created federal Financial Stability Oversight Council;
- A new proposal to repeal, for health insurers, the limited antitrust exemptions provided by the 1945 McCarran-Ferguson Act;
- A long-term extension of the National Flood Insurance Program;
- The impact on P/C insurers of federal health policy, including but not limited to the 2010 health care financing law; and
- The increasingly remote prospects for a federal financial backstop for state natural disaster funds.
Regarding the latest attempt to repeal the McCarran-Ferguson exemptions for health insurers, Litjen said that health carriers are less dependent on the exemptions than the P/C industry, and perhaps less concerned for its preservation.
P/C trade associations are on alert, however, should there be any attempt to extend a repeal of McCarran-Ferguson to medical malpractice insurance, a P/C line of business, he said.
“In such a small specialty line, the repeal of McCarran-Ferguson would hurt competition,” Litjen said. “It would hurt new entrants into the line.”
Federal health policy is another area for the industry to watch, the PCI lobbyist said. “We can expect major, if not tectonic, changes in cost-shifting in this area. I predict some real adverse impacts on our industry,” he said.
AAIS is a national advisory organization that develops policy forms and rating information used by more than 700 P/C insurers.
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