June 20, 2017

Highlights From the 2017 NFI Insurance Public Policy Summit: Legislative Priorities, Administration and State Direction, and an Industry View

For the 13th year, Faegre Baker Daniels partnered with Networks Financial Institute (NFI) and the Scott College of Business at Indiana State University to present the Insurance Public Policy Summit in Washington, D.C. on May 23, 2017. This year's Summit focused on the impact of the new administration on all levels of the insurance industry: state, federal and international.

Below are highlights and pictures from the NFI Summit presentations.

Introduction

Dr. Brien N. Smith, dean of Indiana State’s Scott College of Business, welcomed the standing room-only audience of approximately 140 industry professionals, congressional staff, past and current state regulators, federal officials, academics, and industry stakeholders and commentators. Student Larynda Keith spoke for the NFI Scholars. The Indiana State University speakers were introduced by Faegre Baker Daniels Consulting Chair David Zook and Director Jennifer Hallowell.

Capitol Hill Perspectives in the New World

Rep. Sean Duffy (R-WI), chairman of the Subcommittee on Housing and Insurance of the House Financial Services Committee, kicked off the presentations with a Capitol Hill perspective on insurance in the new federal government. 

  • Chairman Duffy provided an overview of the National Flood Insurance Program (NFIP) reauthorization and discussed his committee’s attempts to balance actuarially sound rates with affordability concerns.
  • He indicated that the legislation will be released very soon, but it could be divided into smaller bills for passage. (The week of June 12, the House Financial Services Committee began marking up several individual bills that will ultimately be packaged into an NFIP reauthorization.)
  • Chairman Duffy took several questions over the NFIP proposal and noted that the bill was not perfect, but it is aimed to improve the program while recognizing the difficult politics surrounding the issue.
  • In response to a question regarding the Covered Agreement, he noted a desire for clarity on a few key issues, but stressed that he does not want to renegotiate the entire agreement.

FaegreBD Partner Alison Watson introduced Chairman Duffy.

The NAIC and State Regulation: Priorities and Challenges

Michael Consedine, CEO of the National Association of Insurance Commissioners, gave a comprehensive report on the priorities and challenges facing the National Association of Insurance Commissioners (NAIC) and state regulators in a one-on-one exchange with FaegreBD Partner Pat Hughes.

  • Consedine discussed the Covered Agreement and the NAIC’s hope for additional clarification on the agreement.
  • He noted that the NAIC had hoped for a more ‟principled” approach during the negotiations, rather than a ‟prescriptive” one.
  • Consedine also highlighted the NAIC’s intensive new efforts on macroprudential regulations to support financial stability.

Perspectives From Industry Leaders

A panel of industry leaders discussed public policy priorities for the industry. Moderated by FaegreBD Partner Scott Kosnoff, the panel included:

  • David Sampson, president and CEO, Property Casualty Insurers Association of America
  • Leigh Ann Pusey, president and CEO, American Insurance Association
  • Chuck Chamness, president and CEO, National Association of Mutual Insurance Companies
  • Peter Schaefer, president and CEO, Hannover Life Reassurance Company of America, and chair of the American Council of Life Insurers (ACLI)

The panel discussed the following:

  • The persistent and broad disagreement over the Covered Agreement, a conversation that prompted significant debate over the merits of the deal among panelists. Leigh Ann Pusey expressed strong support for the agreement, while Chuck Chamness pointed out the deal’s shortcomings.
  • The CHOICE ACT, the current repeal-and-replace bill for Dodd-Frank, sponsored by House Financial Services Committee Chairman Jeb Hensarling, R-TX. The panelists discussed the areas where the insurance industry is in broad support of reform.

The Federal Reserve and the Insurance Industry

Thomas Sullivan, associate director, Division of Supervision and Regulation, Board of Governors, Federal Reserve System, gave a comprehensive Federal Reserve report in a moderated exchange with FaegreBD Partner Sara Powell.

  • Sullivan provided an overview of current workstreams at the Federal Reserve, including a status update on pending rulemakings. He explained that, despite the three vacancies on the Board of Governors, the Federal Reserve is hard at work tackling the issues of the day.
  • Sullivan emphasized that the Federal Reserve is not bank-centric on insurance issues and tries hard not to duplicate regulatory efforts.
  • Sullivan noted that he is an “ardent, feverish” supporter of state regulation of the insurance industry and touted the NAIC’s 150 years of success in regulating the industry.
  • He explained that resolution planning for certain enterprises is an important tool because it drives management to think hard about where they place their priorities across the institution. 

Covered Agreements and International Standards: A View from the Beach

Michael McRaith, past director of the Federal Insurance Office, provided his perspectives on the Covered Agreement and international standards.

  • McRaith touched on his time as FIO Director and provided perspective as Congress and the new administration debate the role of the federal government in insurance.
  • McRaith passionately championed the federal role on international matters.
  • McRaith discussed the Covered Agreement in the context of the larger discussion over insurance – including the ongoing health care debate.
  • He compared the concerns voiced by some surrounding the role of the federal government in negotiating the Covered Agreement versus the lack of concerns in the U.S. House of Representatives passing legislation that repealed McCarron-Ferguson for health care.

Mr. McRaith was introduced by FaegreBD Consulting Director Josh Andrews.

Financial Regulation in the Era of Donald Trump

Christopher Whalen, chairman, Whalen Global Advisors, discussed financial regulation in the era of Donald Trump.

  • Whalen provided an overview of the 2008 financial crisis, the causes and response from the federal government, and how that dynamic is shifting in the early stages of the Trump administration.
  • Whalen presented the case that the most likely, significant piece of legislation to move during the 115th Congress will be some form of Dodd-Frank reform. He noted that reforming the Affordable Care Act or comprehensive tax reform will be significantly more challenging.

Reza Houston, NFI director of research and assistant professor at Indiana State University, introduced Whalen.

Legal and Political Implications of the New World

Hon. Tim Pawlenty, president and CEO of Financial Services Roundtable and former governor of Minnesota, presented his thoughts on the legal and political implications of the new world in a moderated exchange with FaegreBD Partner Andrew Humphrey.

  • Governor Pawlenty provided additional context on the voting results of the election with respect to specific voting populations — and what those results mean for the Trump administration’s agenda.
  • He discussed President Trump’s actions to date in the context of the populist message of his campaign, using the Department of Labor’s Fiduciary Rule as a recent example.
  • Governor Pawlenty offered his thoughts on where the administration would go next and outlined some of the difficult choices they would have to make on tax reform and other priorities.

Highlights From the 2017 NFI Insurance Public Policy Summit (Image Gallery)

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