By Scott Maker, senior vice president, Government Affairs
The agenda in Washington for the final two years of the Obama administration has begun to take shape, presenting both risks and opportunities for our industry and its public policy priorities.
First, a bit of good news.
In its first week in session, Congress passed legislation establishing a national licensing regime for insurance agents and brokers, legislation that had previously been stalled for years. The National Association of Registered Agents and Brokers (NARAB) provides a one-stop licensing compliance mechanism for insurance agents and brokers operating outside of their home states, while preserving the authority of states to supervise and discipline insurance producers. This legislation provides a more competitive insurance market and improves state insurance regulation to the benefit of consumers. Once fully implemented, we hope it will help create efficiencies in product distribution.
No doubt that you've noticed that tax reform is very much on the minds of lawmakers. There is agreement in both parties that U.S firms are disadvantaged because we have the highest corporate tax rate. While the industry may stand to benefit from a lower rate, our businesses could be negatively impacted by a number of proposals to offset the cost of reducing corporate taxes. The industry is engaged with key lawmakers as tax reform is considered by the House Ways and Means and Senate Finance committees.
Solvency of the Social Security Disability Insurance (SSDI) program is also on the agenda. Without a legislative solution, in late 2016 the SSDI trust fund is projected to be depleted, triggering an automatic cut in SSDI payment by approximately 20 percent. The political cost of failure to act would be high, and a simple solution of transferring funds from the Social Security retirement fund to the disability fund is an option. But a recent change in the rules of the House of Representatives makes such a transfer more difficult, and this will drive a broader debate about reform.
That debate presents an excellent opportunity for us to raise the beneficial impact on SSDI when more workers have private disability insurance. In Washington we are proactively engaged in telling the story about how our efforts to work with employees, their employers and their physicians maximizes the chances of someone staying at work or returning to work when ready in the event of illness or injury.
When we talk in Washington about how financial protection policies benefit employees, employers and the government itself, we also point out that too few workers are covered. To address this problem, we are advancing a proposal to facilitate automatic enrollment for these policies, which we hope will gain traction this Congress. We make the point that Social Security and government poverty assistance programs benefit when incomes are protected. We will certainly keep you apprised of developments with this issue.
In the states, we are also seeing some themes emerging from the flurry of proposed legislation being introduced in state legislatures. Implementation of the Affordable Care Act continues to pose challenges, as does finding creative ways to fund and manage state budgets. Additionally, more states are attempting to change antiquated insurance laws in order to allow more electronic commerce. While many of these proposals are well-intended, they struggle to balance reasonable consumer protections with insurer flexibility – in other words, to make products more accessible while doing business in an ever-changing technology landscape.
2015 is shaping up to be a challenging, but exciting, year for our industry. We appreciate your partnership in promoting our industry and our 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.