NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS 2016 ADVOCACY AND POLICY PRIORITIES

Transcription

1 NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS 2016 ADVOCACY AND POLICY PRIORITIES

2 ABOUT PIA S ADVOCACY EFFORTS The National Association of Professional Insurance Agents (PIA) represents independent insurance agencies and their employee-agents in all 50 states, Puerto Rico, and the District of Columbia. They operate cutting edge agencies and treat their customers like neighbors, providing personal support and service. PIA represents members interests in state capitals and in Washington, D.C., to ensure that lawmakers and regulators understand and support the independent agency system. PIA s grassroots campaigns; our annual PIA Federal Legislative Summit and District Lobbying Day events; and our political action committee, PIAPAC, give individual agents a powerful collective voice in government. PIA works with carriers and industry organizations the National Association of Insurance Commissioners (NAIC), the National Council of Insurance Legislators (NCOIL), the Association for Cooperative Operations Research and Development (ACORD), and others to ensure that the concerns of independent agencies are addressed. Members have access to materials to strengthen their agency and to keep them up to date with industry regulations and trends. 2 National Association of Professional Insurance Agents

3 POLICY AND ADVOCACY PRIORITIES PIA National staff has reviewed past policy positions and current congressional priorities and consulted with PIA membership across the country to develop its top five 2016 Policy and Advocacy Priorities. Building on our advocacy successes in 2015, PIA will also continue to focus on a multitude of other business and policy issues that impact independent agents, as well as monitor and address emerging and urgent policy issues as they arise. AGENT LICENSING UNIFORMITY: PIA supports increasing uniformity and reciprocity for producer licensing through state insurance departments and as necessary through targeted federal legislation. ROLE & VALUE OF AGENTS IN HEALTHCARE REFORM: PIA supports the critical role that independent agents play in the sale and servicing of health insurance. PROMOTION OF SMALL BUSINESSES & TAX REFORM: PIA supports a clear and simple tax code and reducing individual and corporate income tax rates for small businesses. PIA opposes tax provisions and regulations that impede small business growth. PROTECTION OF STATE INSURANCE REGULATION: PIA supports a modern, state-based insurance system and opposes any federal regulation or international standards that would destabilize or supplant state-based regulation. SAFEGUARDING OF IMPORTANT P&C PROGRAMS: PIA supports the vital role and value that independent agents play in the delivery of federal insurance and reinsurance programs, including the federal crop insurance, flood insurance, and terrorism risk insurance programs Advocacy and Policy Priorities 3

4 AGENT LICENSING UNIFORMITY PIA supports increasing uniformity and reciprocity for producer licensing through state insurance departments and, as necessary, through targeted federal legislation. The passage of the Gramm-Leach-Bliley Act in 1999 required states to enact uniform or reciprocal licensing standards for producers. Since then, great strides have been made in achieving uniformity and reciprocity among states. Nonetheless, there remain regulatory redundancies, inefficiencies, and inconsistencies that result in unnecessary costs to and burdens on insurance producers and consumers. WORKING WITH NIPR AND NAIC ON STATE LEGISLATION AND REGULATION: Throughout 2015, PIA worked with National Insurance Producer Registry (NIPR), the National Association of Insurance Commissioners (NAIC) Producer Licensing (EX) task force and working group, state regulators, our state affiliates, and our industry partners to increase uniformity and reciprocity in producer licensing. In 2016, PIA will continue to work diligently with stakeholders to ensure that producer licensing laws and regulations are sensible, effective, and collectively compatible, including advocacy for uniform renewal dates across states and for continuing education requirements to avoid redundancy, among other issues. The more uniform and successful the states systems are, the more successful the ultimate implementation of the National Association of Registered Agents and Brokers (NARAB) will be. SUPPORTING TARGETED FEDERAL PRODUCER LICENSING LEGISLATION: NARAB an independent, non-governmental, non-profit membership organization through which non-resident producer licensing requirements may be adopted and applied uniformly across states was passed in early January NARAB will facilitate licensing reciprocity without creating a new federal insurance bureaucracy. In 2016, the proper implementation of NARAB will be a top priority of PIA. We will work with the administration, the NAIC, and our industry partners to ensure a smooth start-up process for the association. MONITORING FIO ACTIVITY: The 2015 Federal Insurance Office (FIO) annual report included its endorsement of NARAB and intent to monitor the governance and operation of NARAB. As the FIO is statutorily prohibited from assuming a regulatory role, PIA opposes any active role the FIO may play in the implementation and ongoing operations of NARAB. In 2015, the FIO continued to target specific insurance issues and built its annual report, issued in September, around them. These issues include cybersecurity, insurer solvency, the evolution of private-passenger auto insurance, and potential National Flood Insurance Program (NFIP) reforms. In 2016, PIA will continue to participate in the FIO s insurance discussions. We will represent PIA members and articulate the role, experiences, expertise, and value that our members bring to these issues every day in the insurance marketplace. 4 National Association of Professional Insurance Agents

5 ROLE & VALUE OF AGENTS IN HEALTHCARE REFORM PIA supports the critical role that independent agents play in the sale and servicing of health insurance. The Patient Protection and Affordable Care Act (ACA) was signed into law in March 2010, dramatically changing the health insurance landscape. Among other things, the ACA established online health insurance exchanges, administered by states and the federal government. On the exchanges, individuals and small businesses can purchase private insurance plans. The exchanges went live in October Since that time, exchange operations have been fraught with challenges for agents and brokers, many of which will persist in PIA has focused on rolling back areas of the ACA that are harmful to independent insurance agents and small businesses. In 2015, our efforts paid off when Congress passed and President Obama signed into law the Protecting Affordable Coverage for Employees (PACE) Act. The legislation enables states to keep the current definition of a small group market in health insurance at 50 or fewer employees. Expanding the small group market definition would have forced mid-size employers to abide by ACA small group market rating rules that would have forced premiums to increase, perhaps as much as 18%, according to some studies. It would also have forced mid-sized employers to change their plans. PIA actively lobbied for passage of the bill. In 2016, PIA will continue to support legislation that will improve the ability of independent agents to sell insurance and support the system of employer-sponsored health coverage. SUPPORTING THE VALUE OF AGENTS: PIA is dedicated to guaranteeing that the value and role of licensed professional agents is properly recognized in the sale of health insurance. The ACA created a class of assistance personnel, generally called Navigators, to educate the public about healthcare plans. By working primarily through community centers and call centers, Navigators are intended to help Americans gain access to health plans sold on the exchanges, but they are prohibited from enrolling anyone into a health plan. PIA supports strong consumer protections for activities performed by Navigators. In 2016, PIA will continue efforts to support the value of independent agents by working with the NAIC, PIA state affiliates, and state insurance departments and legislatures to ensure that ACA assistance personnel are properly licensed and regulated under state and federal law. PIA will also support legislation and regulation in Washington, D.C. that ensures strong consumer protections for Navigators activities and to encourage utilization of the agent and broker community. SUPPORTING CHANGES TO THE MLR: On Capitol Hill, PIA will continue to support legislation to make sure that consumers have adequate access to health insurance agents and brokers. The ACA created the medical loss ratio (MLR) requirement, 2016 Advocacy and Policy Priorities 5

6 which is designed to limit the amount that a health insurance company can spend on administrative costs. The MLR requirement was intended to ensure that consumers receive more value for their healthcare dollar. PIA agrees with this goal but believes that agent and broker commissions were improperly classified as administrative costs, a classification that limits consumer access to an important resource. This negatively affected independent insurance agents, as well as consumers and businesses that increasingly lack access to qualified health experts to advise them on their insurance plans. To address this, PIA has endorsed the Access to Professional Health Insurance Advisors Act of 2015 (H.R. 815/S. 1661), which was introduced by Rep. Billy Long (R-MO) and Rep. Kurt Schrader (D-OR) and Senators Johnny Isakson (R-GA) and Christopher Coons (D-DE). The proposed legislation clarifies that producer compensation will not be considered as part of MLR calculations under the ACA. PIA will continue to urge action on this bill in REPEALING THE SO-CALLED CADILLAC TAX : The Cadillac Tax provision of the ACA would impose a 40% tax on so-called overly generous health plans starting in 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% 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 ten years, over 70% 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. PIA strongly supports repealing the Cadillac tax and has endorsed S by Sens. Dean Heller (R-NV) and Martin Heinrich (D-NM) in the Senate and a companion bill in the House (H.R. 2050) by Rep. Joe Courtney (D-CT). 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 PIA is pleased by this delay but will continue to advocate for the full repeal of the tax in National Association of Professional Insurance Agents

7 PROMOTION OF SMALL BUSINESSES & TAX REFORM PIA supports a clear and simple tax code and reducing individual and corporate income tax rates for small businesses. PIA opposes tax provisions or regulations that impede small business growth. 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 2015, the ascent of Rep. Paul Ryan (R-WI) to Speaker will bring renewed attention to the issue of tax reform. As a result of the leadership change, Rep. Kevin Brady (R-TX) will take over as Chairman of the House Committee on Ways and Means. This change in leadership, and the administration s interest in engaging on this issue, may present opportunities to make bipartisan reforms to the federal tax code. REDUCING BURDENS FOR SMALL BUSINESSES: The sheer complexity of the U.S. tax code remains a constant threat to small businesses and their ability to grow. According to research by the Small Business Administration (SBA), compliance costs are particularly substantial for small businesses. It s imperative that Congress address the unnecessary complexities and provide a system that is clear and competitive. Small businesses are struggling to keep up with the consequences of the current U.S. tax code and regulatory environment. PIA encourages swift congressional action to eliminate these burdens. REDUCING TAX RATES FOR SMALL BUSINESSES: Small businesses are burdened by overly complex compliance measures, and the cost of doing business is significant, too. The same research by the SBA shows that the average effective tax rate for small businesses is substantial, particularly as compared to that of a large business in this country, many of which pay significantly less or nothing at all placing small businesses at a competitive disadvantage. This disparity only accounts for federal income tax and no other federal taxes to which small businesses may be subjected, including Social Security; Medicare; employment; or excise tax, and excluding any state or local taxes. Small businesses must balance these considerable taxes and ever-increasing operating costs, all while attempting to make a profit. 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. In 2016, 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 Advocacy and Policy Priorities 7

8 PROTECTION OF STATE INSURANCE REGULATION 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. This legislation, championed by Rep. Bill Posey (R-FL) and Rep. Brad Sherman (D-CA) and Senators David Vitter (R-LA) and Jon Tester (D-MT), improves 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 protects policyholders from actions taken by the Federal Deposit Insurance Corporation (FDIC) 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. In 2016, PIA will focus efforts to protect the state-based insurance regulatory system by: Working with members of Congress on legislation to ensure the continued implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and to establish appropriate oversight for international agreements that touch on state insurance regulation; Collaborating with the NAIC and NCOIL to educate state policymakers on the importance of emerging and ongoing regulatory issues and ensure the proper implementation of prudential insurance regulations and legislation; Monitoring the activities of the Department of Treasury, including the FIO and the Financial Stability Oversight Council (FSOC), to ensure that the federal government is not encroaching on state-based insurance regulation or placing an undue burden on independent agents; and Monitoring international standard-setting developments, trade negotiations, and FIO efforts on certain international agreements to ensure there is no negative impact on state insurance regulation or independent agents. AUTO INSURANCE AFFORDABILITY: The FIO has undertaken to complete an affordability study on auto insurance that seeks to define affordability and create metrics by which 8 National Association of Professional Insurance Agents

9 affordability could be objectively measured. The FIO study particularly is concerned with the availability and affordability of auto insurance for what it terms Affected Persons, or people in traditionally underserved communities, minorities, and low- and moderate-income individuals. The study is being driven in part by a concern that data being collected by the NAIC is inadequate for the purpose of measuring affordability and accessibility to auto insurance. PIA is concerned with the FIO s attempt to define affordability as a fixed measure of income and has concluded that it would be more effective for the FIO to study auto insurance affordability in the context of other noninsurance cost drivers and income-related factors, including state tort law and highway safety measures. In the upcoming year, PIA will continue to monitor the FIO activity on auto affordability and respond to requests for comment on the subject as appropriate. CYBERSECURITY: Over the last several months, the NAIC drafted a Bill of Rights for consumers on cyber risk and insurance. In mid-october, the draft was adopted by the Cybersecurity (EX) Task Force of the NAIC and added to the fall National Meeting agenda for adoption by the Executive Committee. The Cybersecurity Bill of Rights describes what consumers may expect from insurance companies or agents when they collect, maintain, and use consumers personal information, including the rights a consumer may have when his/her personal information is involved in a data breach. PIA National agrees that there must be a consistent and coordinated national approach to cybersecurity, highlighting cooperation among states and interfacing with the federal government. In August 2015, PIA joined with industry colleagues the Council of Insurance Agents & Brokers (CIAB), the National Association of Health Underwriters (NAHU), and the National Association of Insurance and Financial Advisors (NAIFA) to caution that the revised Cybersecurity Bill of Rights may create confusion for consumers because the NAIC draft implies the existence of consumer rights beyond those to which consumers are legally entitled under current law. Following its adoption by the Cybersecurity Task Force, the Cybersecurity Bill of Rights was modified by Task Force leaders. The latest version of the document, now known as the Roadmap for Cybersecurity Consumer Protections, will serve as the basis for a new model law to be developed during the upcoming year. The Roadmap was adopted by the Executive Committee at the end of December. PIA will continue to engage with the NAIC on a meaningful document that helps both industry and consumers navigate the cybersecurity threat Advocacy and Policy Priorities 9

10 SAFEGUARDING OF IMPORTANT P&C PROGRAMS PIA supports the vital role that independent agents play in the delivery of federal insurance and reinsurance programs started off successfully for PIA s priorities to protect the P&C market, as Congress began the new session by reauthorizing the Terrorism Risk Insurance Act (TRIA) through December 31, The newest iteration of TRIA requires the Secretary of the Treasury to conduct an annual study, beginning no later than June 30, 2017, to identify competitive challenges faced by small insurers in the terrorism risk insurance marketplace. In 2016, PIA will continue our work to protect and lay the groundwork for future reauthorization of vital federal P&C programs like TRIA. CROP INSURANCE: PIA successfully worked to oppose a $3 billion cut to the Federal Crop Insurance Program (FCIP) in the fall of The cut was included in the Bipartisan Budget Act of 2015 (H.R. 1314), which passed through the House and the Senate at the end of October and was signed by President Obama on November 2. Restoration of the funds came in the form of an amendment to a highway measure (H.R. 22), which was approved by the House and the Senate on December 3 and signed by President Obama on December 4. The latter legislative action delivered on promises made by congressional leadership to reverse the cuts following the passage of the Bipartisan Budget Act of In 2016, PIA will continue to oppose any effort to cut crop insurance or reopen the Agricultural Act of 2014, which reauthorized the FCIP through FLOOD INSURANCE: PIA supports the National Flood Insurance Program (NFIP) 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 2016, PIA will continue to work with the Federal Emergency Management Agency (FEMA) and Congress to support solutions to eliminate the NFIP s debt and put the program on a path to fiscal stability ahead of September 30, 2017, when the program is up for 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. To this end, PIA helped develop and will continue to advocate for H.R. 2901/S.1679, the Flood Insurance Market Parity and Modernization Act, which was introduced in mid-2015 by Rep. Dennis Ross (R-FL) and Senator Dean Heller (R-NV). 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. 10 National Association of Professional Insurance Agents

11 2016 Advocacy and Policy Priorities 11

12 GOVERNMENT AFFAIRS STAFF CONTACTS: Jon Gentile, Vice President, Government Relations Lauren Pachman, Counsel & Director of Regulatory Affairs Jennifer White, Legislative Associate NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS 400 North Washington Street 2 nd Floor Alexandria, Virginia Telephone: (703) Fax: (703)