The Independent Insurance Agents and Brokers of America (IIABA) seems confident that with the current environment in Washington, D.C., the association will advance its legislative aims.
PUBLIC POLICY ANALYSIS & OPINION
By Kevin P. Hennosy
IIABA must be careful in courting political parties
Since insurance, as of this writing, is regulated by the states, and roughly half of the nation's governors are from each party, the IIABA cannot afford to be associated too strongly with either party.
The Independent Insurance Agents and Brokers of America (IIABA) seems confident that with the current environment in Washington, D.C., the association will advance its legislative aims.
The IIABA has benefitted from a good relationship with Democrats; they now enjoy being "in" with Republicans.
For example, Democrats tended to support producer interests over banking interests when considering regulatory and competitiveness issues. Congressional Democrats also acted to place controls on the Office of Comptroller of the Currency's (OCC) pre-emption activities. Both issues remain on the agenda of independent agents.
Now that the Republicans have come to dominate, the IIABA press statements are naturally warm to the Republicans. However, considering slim Republican majorities in both houses of Congress, the IIABA may want to keep a few of those Democratic phone numbers in their vaunted PDAs. Just in case.
No one can argue the political wisdom of building close ties with committee chairs, caucus leaders and those who live and work at 1600 Pennsylvania Avenue. On the day after the midterm elections, IIABA CEO Robert A. Rusbuldt issued an optimistic statement about Republican gains: "The historic election of 2002 has resulted in a legislative body that we believe will take a more holistic and cohesive look at the legislative and regulatory concerns of business owners, employees and consumers across the nation."
The IIABA has a long history of maintaining close and fruitful relationships with the nation's most powerful officeholders. Often these relationships were cultivated before these leaders became officeholders.
Being asked to address the IIABA's annual National Legislative Conference is a rite of passage into the senior political leadership. This year, Senate Majority Leader Bill Frist (R-TN) received the honor of being asked to be the keynote speaker to 800 independent agents and brokers from across the country at the 27th annual conference on April 3. "IIABA has enjoyed a good working relationship with Senator Frist since his arrival in Washington on health care and other issues of mutual interest," said Rusbuldt.
The list of past speakers includes the last three sitting presidents--Ronald Reagan, George Bush (also spoke when he was vice president), Bill Clinton and former Vice President Dan Quayle. The list carries the names of Congressional leaders like the last three sitting House Speakers--Representatives Dennis Hastert (R-IL), Newt Gingrich (R-GA), and Tom Foley (D-WA); three Senate Majority Leaders--Senators Tom Daschle (D-SD), Trent Lott (R-MS) and George Mitchell (D-ME); 2000 Democratic vice presidential candidate Senator Joe Lieberman (CT) and 2000 Republican presidential candidate Senator John McCain (AZ).
Very few interest groups in American politics can point to a list like that one. The list is impressive not only for its "star power" but also for the breadth of its ideological scope. In politics, the ability to balance power is the measure of a truly powerful lobby.
Initiatives
So far, the IIABA seems pleased with the Republican Senate leadership in terms of legislative initiatives. Senator Don Nickles (R-OK), chair of the Senate Budget Committee, has introduced legislation designed to reduce the number of asbestos claims by raising the bar for potential claimants.
In a press statement, Rusbuldt praised Nickles' bill by calling it a "commonsense solution" to a very difficult problem. "With no uniform standard to identify genuinely sick claimants, the flood of claims filed by those who are not ill from asbestos exposure is wiping out the resources of otherwise financially secure companies and draining resources that should be going to those who currently are sick," says Rusbuldt, who also notes that S. 413 contains medical criteria for claimants.
Senior Vice President of Federal Government Affairs Maria Berthoud spoke to the provisions of the bill. "The Nickles' bill will end the diversion of compensation from truly sick individuals by compelling claimants to identify specific asbestos-related symptoms before their claim is litigated," Berthoud says. "However, the legislation also protects individuals whose symptoms surface later in life by extending the statute of limitations for asbestos claims, ensuring they can file for compensation in the future."
Following the State of the Union Address, the IIABA issued statements that trumpeted President Bush's proposals to erect barriers to a citizen's ability to seek redress in the courts and slashing business tax rates. "The president made it distinctly clear that he is committed to helping small businesses and workers' paychecks grow in order to boost the economy," Rusbuldt said.
"IIABA supports the president's efforts to make permanent the tax cuts enacted in 2000 through the Economic Growth and Tax Relief Reconciliation Act, including its lower tax brackets and other pro-growth provisions that will benefit millions of American business owners, workers and families," he pointed out.
While the IIABA has found a friend in the Republicans when it comes to liability and taxation issues, the association has Democratic backers in its war with the banks. As the effort to implement the Gramm-Leach-Bliley Act continues, producers may need some legislative or regulatory help to maintain free and fair competition in the market for financial services.
Support from Democrats for agents seems centered upon the party's backing for "small capital" over "big capital." The Democrats, and particularly liberal Democrats, have an impressive track record of supporting insurance agents against banks, the entrepreneur against the institution.
During the great legislative battles with the banks in the 1980s, the IIABA received great support from Democratic leaders. The Reagan and (first) Bush administrations unleashed the OCC to lobby for bank deregulation. If it had not been for a handful of vocal Democratic Senators like Tom Harkin (D-IA) and Chris Dodd (D-CT), then deregulated bankers would have run roughshod over the financial services market place.
In the 1990s, it was Democratic congressional leaders who developed statutory rules to reign in the OCC. Former Senator Don Riegle (D-MI) insisted on placing restrictions on the OCC through provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.
As a result of the tough stance of Chairman Riegle, the conference committee report highlighted a few examples in which they found the OCC's decisions to preempt state law to be "inappropriately aggressive" and unwarranted (Conf. Rep. at 53). These are the very issues being litigated by the IIABA now in the case of IIABA v. Hawke.
Perceptions
The IIABA must tread lightly with both parties, so as not to create a perception of courting either. To align itself too closely with one party could damage the association's effectiveness on The Hill and in state capitals. Since insurance, as of this writing, is regulated by the states, and roughly half of the nation's governors are from each party, the IIABA cannot afford to be associated too strongly with either party.
Of course a perception of bipartisanship does not please everyone. A Kansas City Democrat named Harry S Truman once stated: "I don't like bipartisans. Whenever a fellow tells me he is bipartisan, I know he's going to vote against me." *
The author
Kevin Hennosy, an insurance writer specializing in the history and politics of insurance regulation, covers the proceedings of the NAIC (National Association of Insurance Commissioners) for Rough Notes readers. Hennosy began his career with Nationwide Insurance Companies and then served as public affairs manager for the NAIC. He has written extensively on insurance regulation and testified before the NAIC as a consumer advocate. He is currently writing a history of insurance and its regulation in the United States.