By Scott Maker, senior vice president of Government Affairs
At the end of 2013 Congress seemed paralyzed by political bickering, and 2014 so far has offered little respite from the partisan struggles in Washington. Against this backdrop, Congress is faced with a number of major issues such as tax reform, entitlement spending and immigration policy, on the heels of the recent vote to raise the federal debt ceiling.
The close of 2013 also brought with it significant development for our industry — the release of the Federal Insurance Office’s (FIO) report, How to Modernize and Improve the System of Insurance Regulation in the United States. The much-anticipated report does not recommend direct federal regulation of insurance, but does recommend significantly greater federal involvement in a number of areas. Rather than framing the issues as whether federal or state regulation of insurance is “better,” the report frames the issues as “whether there are areas in which federal involvement in regulation under the state-based system is warranted.”
It remains to be seen what effect the FIO report will have on insurance regulatory policy in the years ahead. The FIO has an ongoing charge to monitor all aspects of the insurance industry, and the report itself hints that there may be successive reports that call for additional measures if the shortcomings identified in the report persist. At a minimum, this puts pressure on states to discuss the report’s recommendations at the NAIC, and we expect to see increased NAIC activities on the issues identified in the report.
We have seen some positive momentum in Congress on the National Association of Registered Agents and Brokers Reform Act of 2013 (NARAB II) bill. NARAB II would provide for licensing, continuing education, and other non resident insurance producer qualification requirements to be applied on a multi-state basis. The FIO report specifically recommends that Congress adopt NARAB II, and the NAIC, state regulators and agent groups all support this bill that would streamline the producer licensing process. Unfortunately NARAB II is attached to another bill impacting the National Flood Insurance Program which could cause it to get entangled in Congressional debate. We continue to remain engaged in doing what we can to get this bill passed.
Also on the federal front, Unum and others in the industry are pursuing legislation to expand the number of individuals who have access to and are covered by private income protection coverage. Specifically, the industry’s legislative proposal would facilitate auto-enrollment for employers by clarifying that voluntary auto-enrollment is a permissible activity under federal law. The legislation would also establish a consumer-oriented disability information clearinghouse at the Department of Labor that would help raise awareness about disability risk and common impairments — and encourage consumers to be prepared. Taken together, these provisions would help ensure that more workers and families protect themselves against loss of income due to illness or injury.
While the industry is pursuing legislation at the federal level, we are also following a somewhat parallel track at the state level to identify opportunities for states to encourage more employers to make financial protection benefits available to their employees. A critical component of this effort is to raise awareness among state legislators of the valuable role that financial protection products play in protecting consumers and relieving the financial burden on state safety nets. We and the rest of the industry are very engaged in making sure that state legislators and regulators are cognizant of the value our industry provides to their constituents.
We appreciate your partnership in promoting our industry’s public policy message. If you have any questions about these issues, please feel free to contact Scott Maker in Unum’s Government Affairs department at firstname.lastname@example.org.