WASHINGTON, D.C., May 3, 2007 -- Big “I” CEO Bob Rusbuldt moderated an Insurance Panel and Town Hall meeting of industry stakeholders at the National Legislative Conference & Convention of the Independent Insurance Agents & Brokers of America (IIABA) in Washington, D.C. on Friday, April 27. The forum was the first insurance town hall meeting to include representatives from all industry stakeholders: a legislator, an insurance regulator, a consumer advocate, an independent agent and an insurance carrier CEO. The unique forum and diverse group discussed major trends and challenges facing the insurance industry and consumers today, including the aftermath of Hurricane Katrina, natural disasters and flood insurance, the McCarran-Ferguson Act, industry profitability, and terrorism risk.
Joining Rusbuldt on the panel were:
Alex Soto, President, Independent Insurance Agents & Brokers of America
Congressman Earl Pomeroy (D-ND)
Tom Van Berkel, Chairman and CEO, Main Street America Group
Robert Hunter, Director of Insurance, Consumer Federation of America
Roger Sevigny, New Hampshire Insurance Commissioner
Panelists spent considerable time discussing the state of the industry post Hurricane Katrina and the mistakes that were made, but also discussed solutions such as a federal backstop or a tax credit for homeowners.
Van Berkel said he thought it should be a multi-step solution. “One thing is rate deregulation,” he said. “I think we need to be able to match exposures with price…a federal fund, along with some tax-free reserving for homeowners.”
Sevigny added, “Tax deferral on reserves for catastrophes, we believe that’s a good thing…tax credits, we believe that’s a good thing and stricter building codes we believe are a good thing.”
In regard to TRIA, Hunter said that while he initially supported it, he is not in favor of a renewal. “When 9-11 happened, I was the first person to call for TRIA…saying you got to do it by the end of the year, he said. “But then I watched what happened …so I changed my position… But I think NBCR (nuclear, biological, chemical, radiological) will be added and I think Congress will back that up.”
Panelists also discussed a possible repeal of the McCarran-Ferguson limited antitrust exemption. “What my fellow agents want are more markets and more choices for consumers in Florida,” Soto said. “We’re told time and time again, they (companies) will have difficulty having confidence in doing business if they don’t have historical loss data and the ability to use aggregated information under McCarran Ferguson.”
Sevigny noted that he believes the reason that Congress wants to look at repealing McCarran-Ferguson is misguided. “I can tell you that as a body, the NAIC believes the repeal of the exemption would be bad for the consumers. …and our job is to protect the consumers,” Sevigny said.
When asked of the prospects of the legislation in Congress, Pomeroy responded, “I don’t see anything at all on the fast track for McCarran, nor should there be.”
The panel also touched on insurance regulatory reform and compensation. “Unfortunately contingency commissions and the local independent agent got dragged into this and as a result it’s become very confusing,” Pomeroy said. “I think as we go forward we are going to see a fundamental shift in the way agents are compensated and more and more companies are going to be looking at eliminating contingency commissions they had in the past.
Hunter stopped short of calling for eliminating contingent commissions, saying, “I think they need to at least be regulated and moderated.”
Attorney generals are not good regulators, Sevigny said, “But I think Spitzer kicked up legitimate problems. We need to be diligent and be proactive and when we’re not, when we have attorneys general get involved, things may go well beyond the things addressed.”
The CEO Panel and Town Hall meeting was one of the highlights of the Big “I” National Legislative Conference & Convention. Other highlights included: appearances by Senator Joe Lieberman (ID-Conn.), House Republican Whip Roy Blunt (R-Mo.), and journalist and television host Bill O’ Reilly gave the keynote speech.\
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.