Election results give Northeast more clout on insurance issues

After the midterm elections, Northeast Democrats are moving into positions of power that could help their states economically as well as affect progress on insurance legislation.

Democrats are now well-positioned to bring home more bacon on everything from transportation to military contracts after taking control of the House, according to Darrell West, a political science professor at Brown University in Rhode Island.

“It could be an economic windfall for the entire region,” West said. “It’s something I think will have major ramifications in terms of resource distribution.”

Northeast Democrats with seniority are poised to take influential positions on committees that deal with everything from tort reform and flood insurance to terrorism insurance and health insurance, meaning the insurance industry agenda could shift as well.

As a result of the committee reassignments, the industry expects to be able to move ahead with the extension of the Terrorism Risk Insurance Act and reforms of the National Flood Insurance Program, which Democrats have in the past supported. Prospects for blocking a federal charter for insurance regulation and stopping association health plans also improved.

Some of the key issue issues that the insurance industry could have trouble moving under Democrat control of Congress compared to Republican include tort reform and repeal of the estate tax.

In addition to key committee assignments, Northeast Democrats will have overall clout in the House as U.S. Reps. John Murtha of Pa. and Steny Hoyer of Md. are in the mix for positions in the House leadership, which decides which issues get voted on.

Committee chairs
The House Financial Services Committee, which oversees the banking, insurance and housing industries, has operated in a more bipartisan manner than a number of others on Capitol Hill under Republican Chairman Rep. Michael G. Oxley of Ohio. Democrat Rep. Barney Frank of Massachusetts will likely succeed Oxley as chairman of this important committee. Frank, who is expected to maintain a bipartisan approach while focusing on affordable housing and consumer protection, has supported TRIA.

“The Boston area understands well the need,” noted Ben McKay, senior vice president of federal relations for the Property Casualty Insurers Association of America, commenting on Frank’s position on the need for a federal terrorism backstop such as TRIA.

The major insurance subcommittee, the House Financial Services subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, which is currently chaired by retiring Rep. Richard H. Baker of Louisiana, will likely be turned over to Rep. Paul Kanjorski of Pennsylvania to run.

Sen. Chris Dodd of Connecticut is in line to chair the Banking Committee, which deals with insurance issues on the Senate side. Dodd is among the co-sponsors of TRIA, which current Chairman Republican Sen. Richard Shelby of Alabama, fought.

Sen. Patrick Leahy of Vermont, Leahy could become chairman of the Judiciary Committee where tort reform issues are handled.

The election changes might work in agents’ and the industry’s favor.

Kanjorski and Frank are “well-attuned to the importance of the insurance industry to the American economy,” according to Len Brevik, president and chief executive officer for the National Association of Professional Insurance Agents.

“Rep. Kanjorski has a keen appreciation of the key role played by Main Street insurance agents in assuring continued prosperity. And in contrast to campaign rhetoric, Rep. Frank … has had a good working relationship with outgoing Chairman Mike Oxley (R-Ohio),” Brevik claims.

Frank Mancini, chief executive officer for the Massachusetts Association of Insurance Agents, said his group has had good relations with Frank over the years. “He’s a very practical guy,” Mancini said.

While there are more Democrats, overall Congress may be more moderate than people think and than it has been, adds PIA Senior Vice President Patricia A. Borowski.

Moderate tide
“This election has brought in more moderates on both sides of the aisle,” Borowski said. “That tends to permit a more balanced consideration of our issues. Historically, insurance has fared better during times of centrist, results-oriented leadership. Since it is our job to achieve positive results for our members, we need to work effectively with both sides to achieve results favorable for our issues.”

Not much change
But others caution that not much may change.

“I think in a lot of ways the House is going to be just as polarized with the Democrats in control,” said Scott McLean, chairman of the political science department at Quinnipiac University in Connecticut.

“The new people are just not going to be as high up the totem pole going in.”

Some Associated Press material was used in this report. Copyright 2006 Associated Press. All rights reserved.