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AAMGA Special Section Tackling the issues Governmental Affairs Committee represents AAMGA members on Capitol Hill By Phil Zinkewicz A few years ago, then New York Attorney General Eliot Spitzer, now the governor of New York, held the attention of the AAMGA Governmental Affairs Committee. And, small wonder. Spitzer’s investigation into the operations of the insurance industry was making every segment of the insurance business nervous, each afraid of being tarred with the same brush that was painting the large brokers black. However, through the efforts of the committee and its work with legislators, MGAs and wholesalers emerged victorious. James A. Roe, chairman of the committee, says that many of Spitzer’s investigations have died down, with small exceptions on the fringe. “What our committee is concerned with now is reform legislation on Capitol Hill, proposed legislation that will free MGAs and wholesalers from cumbersome regulations, which negatively impact not only producers, but the consumers they serve.” Roe of Arlington/Roe & Co. in Indianapolis, Indiana, is referring to HR 1065, the Nonadmitted and Reinsurance Reform Act, which was considered in the last session of Congress. The bill, among other things, would streamline the regulation of surplus lines insurance and reinsurance by creating a uniform system of premium tax allocation and remittance, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated purchasers. Last year, through the efforts of the AAMGA and other agents associations, the bill passed in the House by a whopping 417-0, but then died in the Senate because the session closed before action could be taken. The bill has been reintroduced this year, and the AAMGA is hoping that this time around it will succeed in Congress and be signed into law by President Bush. “This bill is really a portion of SMART,” says Roe. “Basically, it says that if an agent has a risk that is based in one state but has offices in other states, taxes and filings need only be presented to the risk’s state of domicile. The state would then be responsible for sharing the taxes with the other states involved. This would result in greater efficiency and easier access for the consumer to the surplus lines arena.” However, if the bill passes in Congress and is signed into law, that doesn’t mean that the Governmental Affairs Committee can rest on its laurels. Says Roe: “The AAMGA, along with other associations including NAPSLO, will be part of a group to determine how to implement the law. For example, the fact that each state would be responsible for sharing taxes paid to them could cause problems in states that are not staffed well enough to take on the task. In this situation, a third party might be appointed to fill the void.” But the reform bill, a hearty meal though it may be, isn’t the only edible on the Governmental Affairs Committee’s plate. Roe says that his committee is watching very closely developments regarding the proposed National Insurance Act, which would call for a national charter for the regulation of insurance. “The AAMGA is staunchly in favor of retaining state regulation of insurance,” Roe says. “Reforms that come out of Washington should be ones that serve to make state regulation less cumbersome, such as HR 1065, not a total revamp of the system of regulation.” And there’s more. In the aftermath of a change in the congressional landscape, the Governmental Affairs Committee is working with legislators to present the AAMGA’s views on such issues as terrorism risk insurance, flood insurance, national disaster catastrophe coverage, an optional federal charter, credit scoring and the McCarran-Ferguson anti-trust exemption. “Our committee, with the help of Bernie Heinze and Paul Spector, wants to make certain that the AAMGA has a strong visibility on Capitol Hill and with state and local legislators,” Roe concludes. “When there is an issue that will affect MGAs and wholesalers, either positively or negatively, we’ll be there and everyone will know we’re there.” * |
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