Election to Have Significant Impact on Agent Issues
Election to Have Significant Impact on Agent IssuesWhat are the consequences for health care, taxes and insurance regulation?The 2012 elections have come and gone, and while there will be many new faces in the 113th Congress next year, there is no shift in the balance of power between the two parties in either the White House or Congress. Many independent agents may be wondering how the elections will impact their livelihoods. Here’s a snapshot of the top federal issues affecting independent agents and their customers, and how the election results may alter the landscape for the end of 2012 and into 2013.Health Care: Near the top of the list of agent concerns is the future of the Patient Protection and Affordable Care Act (PPACA). Unfortunately, the status quo in the balance of power in Washington translates to no wholesale repeal of the PPACA. With the specter of repeal removed for now and the Obama Administration forging ahead with implementation, it is likely that many states will move forward with their portion(s) of implementation as well (state exchange creation, navigator programs, etc.). The Big “I” government affairs team will continue working toward solutions that will address agent-specific issues, such as legislation in both the House and the Senate to exclude agent compensation from the Medical Loss Ratio (MLR) regulations. However, with little Democrat support for the MLR exclusion, it is expected to continue to be an uphill climbTaxes: Tax policy also promises to be a front-burner issue both during the upcoming “lame-duck” Congress and in the upcoming 113th Congress, which will begin in January. All 2001-2003 tax rates are due to expire at midnight on Dec. 31, 2012, resulting in significant increases in individual rates, capital gains and dividends, as well as punitive estate tax rates and exemption amounts if Congress fails to act. With so many independent agencies paying taxes at the individual rates as “pass-through” entities, the potential for drastic tax increases is significant.With President Barack Obama in the White House and a divided Congress, the expected debate in December will likely focus on whether or not to extend rates for “higher income” taxpayers. An effort toward a wholesale overhaul of the tax code is also a possibility next Congress, but will likely be considered in the context of deficit reduction.Crop Insurance: Last spring the Senate passed its version of a Farm Bill, S. 3240, the “Agriculture Reform, Food, and Jobs Act of 2012.” Meanwhile, the House was unable to reach an agreement on its version of a Farm Bill and the bill expired Sept. 30, 2012, though most essential programs, including crop insurance, are funded until March 2013 by a continuing resolution passed by Congress in September. With a heavy focus on budgetary and tax issues in the “lame-duck,” there is not much time left for a full debate on a new Farm Bill. It is highly likely that a one-year extension of the current Farm Bill will be passed and that negotiations for a new bill will begin in the spring. Insurance Regulation: This past July marked the two-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). While the bill largely left the day-to-day regulation of insurance in the hands of the states, it did require the Federal Insurance Office (FIO) to submit a report on ways to “Modernize and Improve the US System of Insurance Regulation.” That report is almost a year overdue, though now that the election is over, it is expected to be released in the near future. With the election results, other provisions of Dodd-Frank that could impact the insurance market (systemic risk oversight, Consumer Financial Protection Bureau, etc.) are expected to continue to see rigorous implementation. Terrorism Insurance: Terrorism risk insurance promises to be a top issue in the 113th Congress, since current authorization of the Terrorism Risk Insurance Act (TRIA) is due to expire on Dec. 31, 2014. Without this program in place, the availability and affordability of terrorism insurance for commercial clients will be in doubt. No matter who controlled the levers of power in Washington, D.C., an extension of the current program was never expected to be easy. While not necessarily a partisan issue, there are a number of federal policymakers, mostly from rural areas, who question the need for the program. However, some form of federal involvement is expected and the Big “I” has made the issue a top priority for the 113th Congress. Every election is guaranteed to have an impact on the livelihoods of Big “I” members, their clients and consumers. Yesterday’s historic election proved the importance of participating in the political process. With so many important issues on the table, it will be more critical than ever for agents to be involved during the 113th Congress by participating in Big “I” grassroots campaigns, contributing to InsurPac and attending the annual Big “I” Legislative Conference April 17-19, 2013, in Washington, D.C. Charles Symington is Big “I” senior vice president of government affairs.