More than 1,000 independent agents from around the country will be visiting Capitol Hill offices in Washington, D.C., today to lobby members of the House, Senate and their staffs.
Called “The Big ‘I’ Day on Capitol Hill,” this annual pilgrimage in the nation’s capital is the main event of the Big “I” legislative conference and convention by the Independent Insurance Agents and Brokers of America (IIABA). The conference began this Wednesday, April 25, and will continue through Friday, April 27.
During their visit with lawmakers, Big “I” members will seek to impress upon their representatives that independent agents are in every state and every district and that they are important participants in the legislative process.
Robert Rusbuldt, IIABA president and CEO, told Insurance Journal there are several issues of concern that agents will discuss with Congressional members today.
The flood insurance program, Rusbuldt noted, expires at the end of May. “And we have to have it renewed obviously. It will be renewed, but the question is, in what form will it be renewed? Will it be a five-year extension or a short-term extension? What reforms will be in the bill? So that’s one of the primary issues we are dealing with.”
Another critical issue is the new healthcare law’s Medical Loss Ratio (MLR) provision, which mandates that health insurers limit what they spend on administrative and marketing costs including payments to agencies. Since implementation of the MLR began in January, health insurance producers have said their commissions have been cut. The IIABA wants to halt what it describes as “the devastating effects” on agents that is being caused by the MLR provision by removing agent compensation from the formula.
“We just had a bill introduced in the Senate to exempt agent/broker commissions from the Medical Loss Ratio provision, so that’s something we are going to be talking about — trying to get those bills (SB 2068 as well as HR 1206 in the House) moving in Congress and get more co-sponsors on those bills,” Rusbuldt said.
There are two things that are affecting the MLR issue. One is the U.S. Supreme Court decision and what the court will do — whether the court will just adjust the individual mandate or go further than that. The outcome of the Presidential election will also be a crucial factor in this issue, Rusbuldt said.
Agents will also be talking about some tax issues with their legislators, he said. “Obviously, there are major tax changes that will happen on Dec. 31 of this year, where taxes are going to go up for small business owners. And so, that’s a major concern because independent agents own their own businesses.”
Other issues include insurance regulatory reform and the Federal Insurance Office. “There are some issues there,” he said. “And the crop insurance is also an issue, where agent commissions are under threat there. So we’ve got six or seven issues that we are working on in Congress today. We have more than 1,000 agents here, from all 50 states.”
In today’s lobbying effort, agents will try to cover all 535 members of Congress, he said. “Many times they go in groups. So you might have 40 or 50 agents or more from a state meeting with a U.S. Senator, or one or two meeting with a House representative that are from that Congressional district.”
Independent agents and brokers are powerful and influential constituents. They are civic and business leaders of their communities and oftentimes have contributed to their representatives’ political campaigns.
“Independent agents and brokers are very active in their communities. They are in the Chamber of Commerce, they are active in their churches and synagogues, they are active in Kiwanis Clubs and many community activities,” Rusbuldt said. “Many times, they are very active in the campaigns of the members of Congress. They know the members, so they are very well-received.”
Hit by A Triple Whammy
Rusbuldt said that the “number-one issue” for agents over the last couple of years has been the state of the economy.
“People weren’t buying new cars. They are not building new houses. They aren’t starting new businesses,” he said.
“We write all the business on businesses and cars and homes and those sorts of things. So, that, combined with the soft market on the property/casualty side, and then with Obamacare cutting agent/broker commissions in health insurance, you’ve had a triple whammy — with the economy, the soft market, and a cut in the employee benefit income.”
So agents have been concerned, Rusbuldt said. “But they are a very optimistic group of people. And I think they think that the future is looking brighter.”
Featured speakers at the Big “I” conference applauded the independent agents’ effort to take their voices and concerns directly to members of Congress.
“There is no substitute for citizen involvement, citizen engagement,” U.S. Sen. John Thune (R-S.D.) told independent agents during his speech at a breakfast meeting Thursday.
“Your presence here, going to Capitol Hill, meeting with your delegations, to discuss how to get the economy growing and create jobs, is critically important. I want to thank you for being here.”
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