You are here:HomeNews CenterInsurance News2010What Does the New Political Lineup in Washington, D.C Mean for Professional Insurance Agents?

What Does the New Political Lineup in Washington, D.C Mean for Professional Insurance Agents?

The massive swing of this year's election hasn't been seen in decades. The last time the Republicans picked up over 60 seats in the...
November 5, 2010


Election 2010 Analysis

The massive swing of this year's election hasn't been seen in decades. The last time the Republicans picked up over 60 seats in the House of Representatives was in 1914 when the struggling economy during President Woodrow Wilson's reign rallied the GOP. The swing wasn't as monumental in the Senate, as the Democrats will retain control.

Here are some significant changes and the possible impact on PIA's issues:

Paul Kanjorski (D-PA): Congressman Kanjorski, a Member of Congress since 1985, is out. He sat on the Financial Services Committee and chaired the subcommittee with jurisdiction over insurance. In this role, he was a major player in advancing legislation that had a major impact on the insurance industry. In recent years, Kanjorski became a supporter of Optional Federal Charters and was a prime sponsor of legislation to create a Federal Insurance Office. Kanjorski was also a major backer of the Terrorism Risk Insurance Act.

Gene Taylor (D-MS): Congressman Taylor, best known in the insurance industry for his continual efforts to add wind coverage to the National Flood Insurance Program (NFIP), lost his race. Many times over, meaningful reforms to the NFIP didn't pass due to his personal campaign to add wind to the flood program. With Taylor's departure, a big obstacle has been removed and a comprehensive reform package including a long-term renewal of the NFIP may be possible.

Ron Klein (D-FL): Addressing a primary need for his state, Rep. Klein drafted legislation that would create federal government involvement in the case of a natural disaster. As drafted, the legislation could have unnecessarily made the United States responsible for recurring problems unique to Florida. He did, however, bring much needed attention to the issue of how to pay for natural disasters. Klein was defeated.

Melissa Bean (D-IL): Congresswoman Bean's race was so close they still haven't declared a winner. With 99% of the precincts reporting, she trails by a few hundred votes. Congresswoman Bean, a member of the Financial Services Committee, is the sponsor of legislation to create an optional federal charter for insurance. Doing so would have tragic consequences for the independent insurance agency system. The chief co-sponsor of the legislation, Rep. Ed Royce (R-CA), won his re-election.

Earl Pomeroy (D-ND): Congressman Pomeroy lost re-election by 10% (nearly 23,000 votes). Rep. Pomeroy was elected to Congress in 1993 after spending 7 years as the North Dakota Insurance Commissioner. Normally carrying high approval ratings, his support of healthcare legislation in Congress this year led to his very rapid demise.

Walt Minnick (D-ID): Rep. Minnick was known as an early supporter of an optional federal charter. He had a strong fundraising advantage, but was defeated.

Assessing the Potential Overall Impact:

The Republicans have stated that they will bring their pro-business agenda to the House of Representatives. While this is a step in the right direction, a number of details are still unknown.

The swing in power could lead to nothing more than gridlock in Congress. The Senate will remain controlled by the Democratic Party, as will the White House. In a press conference on the day after the elections, President Obama made it clear that he will remain steadfast in his current policy direction. While he said he would seek common ground with the GOP, the President did not indicate that he would make substantive changes. He did, however, concede that the new Form 1099 reporting requirements are "burdensome" for small businesses, and vowed to work with Republicans on a legislative fix.

Any major legislation passed through the House could easily die in the Senate. However, should both the House and Senate be able to get legislation through, it could face a veto in the White House (think a repeal of healthcare).

How much of a logjam will we see? That is still unknown. Some looming leadership changes may soon shed some light.

Committee Leadership

In the House, big changes will take place in the Financial Services Committee, the committee that oversees most insurance legislation. Late Wednesday November 3, Rep. Ed Royce (R-Calif.) launched a challenge for the gavel of the House Financial Services Committee against Rep. Spencer Bachus of Alabama, who is next in line for the chairmanship in terms of seniority. Rep. Royce is noted for his steadfast support of an optional federal charter for insurance.

Meanwhile, the subcommittee that presides over insurance matters may end up in the hands of Rep. Scott Garrett (R-NJ). PIA enjoys a solid relationship with Rep. Garrett and he would be welcomed as chairman. In addition to Rep. Garrett, PIAPAC supported other key members of the Financial Services Committee who won their races, including Rep. Bachus (R-AL) and Rep. Gary Ackerman (D-N.Y.)

Over on the Senate side, the committee to watch is the Senate Banking Committee. This was previously chaired by Sen. Chris Dodd (D-CT) who retired this year. The gavel may end up in the hands of Sen. Tim Johnson (D-SD). Sen. Johnson is a supporter of an optional federal charter. A potential contender for the chairmanship could also be Sen. Jack Reed (D-RI). Sen. Charles Schumer (D-N.Y.), who was re-elected with 66 percent of the vote, is expected to remain a "powerhouse" on the Banking committee. Schumer will become the third-ranking Democrat on the committee after Johnson and Reed. It had been thought that Schumer would leave Banking to make a bid for Senate Majority Leader if current Majority Leader Harry Reid (D-Nev.) lost his bid for reelection. Reid, however, won and at this point is expected to remain as Majority Leader.

Depending on how these chairmanship battles turn out, it may become more difficult to derail an Optional Federal Charter; Rep. Royce and Sen. Johnson are both strong supporters of OFC and have been principal sponsors of OFC bills in the past.

Senate Democrats are projected to lose 1-4 seats on all committee panels, once lawmakers return to Washington to assign Congressional office space and committee seats. The overall proportion of Democrats to Republicans in the Senate would determine the allocation of seats on the committee.

As the dust continues to settle on Capitol Hill in the post-election period, PIA will continue to gather insight and provide you with updates on what the next two years may hold for professional insurance agents.

For more information, contact Mike Becker, Director of Federal Affairs at mikebe@pianet.org and (703) 518-1365.