National Underwriter - September 5, 2011

The legislation is H.R. 1063. It may win support in Congress—if the industry successfully argues that the existing rules are more costly than beneficial.

Even though the Centers for Medicare and Medicaid Services supports the current regulation, the Obama administration has promised to act to reduce regulatory burdens on businesses as a means of spurring job creation.

5. STAY TUNED RE:
THE MLR EXEMPTION FOR AGENTS

Insurance agents are pushing for legislation that would exempt healthcare-premium commissions from the medical-loss-ratio (MLR) provision of the healthcare-reform law.

Such legislation has strong support in the House and in the Senate as well.

But, given the Senate process, strong public support for such legislation doesn’t mean it will survive the many procedural hurdles that Senate members can use to block action.

6. FIGHT THE SURPLUS-LINES BATTLE
IN THE STATES

Some support exists for amending the Nonadmitted and Reinsurance Reform Act, which went into effect July 21, to give states more time to adopt a uniform allocation formula for surplus premiums.

But my reading of the tea leaves is that Congress is unlikely to step in; it wants the industry to fight this battle in the states. Few congressmen want to put their limited political capital on the line by seeking to intervene in this contentious issue.

7. ACCEPT THAT AN OPTIONAL
FEDERAL CHARTER IS DOOMED

While some insurers are still pushing for an optional federal charter for insurers, there appears to be no realistic chance that legislation pushing this proposal will even be introduced in this Congress.

Such legislation faces strong
opposition from a considerable portion
of Congress—as well as the electorate—
for less, not more federal government,
and this proposal flies in the face of that
strong opposition.

8. RELAX RE: LIMITING SCOPE
OF FEDERAL INSURANCE OFFICE

Opponents of federal regulation are keeping a close eye on the activities of the new Federal Insurance Office (FIO) to ensure there is no so-called “mission creep” or efforts to expand its authority.

But, given the fact that FIO is just getting on its feet and appears to be moving aggressively to interface with the components of existing state governance, this may be paranoia.

FIO is currently headed by a former state regulator, Michael McRaith of Illinois, and just setting up the office to accomplish the goals already supported by the clear language of the legislation establishing it will take time.