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PIA supports the National Flood Insurance Program as it provides critical support to those affected by floods and coverage that the private market is unable to supply.
PIA remains concerned that delaying risk-based rates, while providing needed relief for many homeowners, does not address the underlying long-term problems of fiscally adequate rates and ongoing stability of the program.
In 2018, PIA will continue to work with the Federal Emergency Management Agency and Congress to support solutions to eliminate the NFIP’s debt and put the program on a path to fiscal stability ahead of any further short-term reauthorization.
PIA will highlight the essential role of the independent agent in delivering this complicated program. PIA will also support legislative solutions to create sensible options for growing the private market. Finally,
PIA will continue to monitor and comment on federal rulemakings and state proposals related to flood insurance, as well as other issues impacting independent agents who sell flood insurance.
PIA National opposed the creation of the FIO from the outset. In 2010, advocates of federal insurance regulation succeeded in including the FIO’s enabling legislation in Dodd-Frank, but it also explicitly prohibited the FIO from acting as a regulator of the business of insurance.
The House of Representatives introduced H.R.3861, the Federal Insurance Office Reform Act of 2017 on Sept. 28, 2017. The bill is sponsored by the Housing and Insurance Subcommittee. It also would authorize FIO to coordinate federal insurance policy and require the office to achieve consensus with the states before advocating or agreeing to positions in international forums, such as the International Association of Insurance Supervisors.
While the proposal would eliminate FIO’s authority relating to purely domestic issues, including the federal authority to engage in broad information-gathering authority and reporting obligation, it retains the office’s existing authority to monitor all aspects of the insurance industry and advise the Treasury secretary on the administration of the Terrorism Risk Insurance Act.
The NAIC has been working to establish uniform standards governing the use of sensitive personal information by insurance companies agents and third-party vendors for nearly two years. In that time, the NAIC has established an executive-level task force, the Cybersecurity Task Force, and populated it with insurance commissioners and heads of insurance departments from nearly every state and the District of Columbia.
During the summer of 2017, the task force released the finalized model legislation, which incorporates several key provisions of New York’s overly burdensome cybersecurity regulation. PIA National continues to advocate for states that adopt the model law to do so with mitigating the expense on agents and brokers in mind.
The “Cadillac Tax” provision of the ACA would impose a 40 percent tax on so-called “overly generous” health plans starting in 2018. The tax applies to fully insured and self-funded employer health plans on amounts that exceed annual limits of $10,200 for individual coverage and $27,500 for family coverage. While proponents of the tax claim only the very wealthy will be impacted, several studies, including one by Forbes, found that, while only 15 percent of employer-sponsored plans will be hit with the tax when it goes into effect, the percentage of affected plans will quickly increase. Five years after it begins, nearly half of all employer-sponsored plans will be subject to the tax.
After 10 years, over 70 percent of employer-based plans will be exposed to the tax. The tax will particularly penalize employers with high costs due to disabled workers, high-cost cancer cases, high cost-of-living areas, employer size and certain industries, such as manufacturing. Due to these concerns, employers are already cutting benefits or dropping plans. In December 2015, Congress included a two-year delay of the tax in the year-end omnibus appropriations bill, meaning the tax will now take effect in 2020 instead of 2018. On Jan. 22, 2018, Congress passed and President Donald J. Trump signed into law another two-year delay as part of the measure to restore funding to the federal government through Feb. 8, ending a partial government shutdown. The tax is now scheduled to take effect in 2022.
Small businesses are one of this country’s greatest assets. They stimulate the economy, create jobs and have a history of pulling this country out of recessions. Despite these significant contributions, they are hampered by overly burdensome laws and regulations. Taxes, at all levels, represent a major cost of doing business and are especially oppressive for small businesses. In 2018, PIA will work with Congress to ensure that small businesses are part of any tax reform package and to reduce tax burdens on main-street business owners. A decrease in the corporate income tax rate, something that has bipartisan support, would protect the role of small businesses and create jobs and it could be self-financing.
PIA supports a modern, state-based insurance system and opposes any federal regulation or international standards that would destabilize or supplant state-based regulation. While states set insurance policy and regulate insurance in the U.S., developments at the international level heavily influence state laws and regulations. Actions by certain federal and international bodies have raised concern that the state-based insurance regulatory system may be unnecessarily eroded in the face of continuing global challenges.
In December 2015, Congress included a PIA-supported provision, H.R.1478/S.798, the Policyholder Protection Act, in the year-end omnibus appropriations bill; however, it failed to make it out of the Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Securities, Insurance and Investment. The legislation sought to improve the ability of state insurance regulators to protect policyholders by ensuring that insurance companies structured under larger financial firms are not held financially responsible for an affiliated bank’s failure or financial crisis. The bill also would have protected policyholders from actions taken by the Federal Deposit Insurance Corporation
that would liquidate insurers, a function of state insurance regulators. It also limits the ability of the FDIC to seize insurance company assets intended for policyholder payments when an affiliated financial entity is subject to liquidation.