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2012 Election Report

The incredibly hard-fought elections of 2012 are now behind us. Insurance agents across the country will have a lot at stake in the coming years, which we’ll take a look at below...
November 7, 2012

The incredibly hard-fought elections of 2012 are now behind us. Insurance agents across the country will have a lot at stake in the coming years, which we’ll take a look at below.

The White House

President Obama’s re-election means many things, but most notably for the insurance industry, it means that the implementation of the Affordable Care Act (ACA) will continue.

The ability of agents to continue selling health insurance – and to be fairly compensated for doing so – remains up in the air. The ACA creates strict Medical Loss Ratio formulas that have already led to limits being placed on agent compensation from health insurance sales. While legislation to curb this is still at play, we know that it won’t be supported by the President.

Participation and fair compensation from health sales through a health exchange are also at play. While Governor Romney campaigned on offering state exemptions from the ACA, states must now decide, if they haven’t already, on whether to offer a state-based health exchange or to allow the federal government to manage and regulate a health exchange in their state. So long as the law remains intact, an agent’s future in health insurance sales is not clear.

The numerous other components of the ACA, many of which will be implemented in 2013 and 2014, will continue unless Congress intervenes. The re-election of President Obama makes it very unlikely that individual ACA provisions, or the entire Act, will be repealed. PIA will continue promoting the valued role of the independent agent as the law’s implementation continues.

There are other legislative initiatives that are likely to be on the Congressional agenda in a second Obama term, many of which could impact professional insurance agencies. Among them:

Tax Reform Proposals

Even before Inauguration Day in January, taxes will be in play as attempts are made to avert automatic budget cuts mandated under the law under sequestration. There is a risk here that independent insurance agencies could face higher taxes, depending on the specifics of various tax reform proposals that may be considered in the lame duck Congress. One possible ray of hope is that both Democrats and Republicans have said that small businesses should not face unfair tax burdens. Most insurance agencies fit the classic definition of small businesses. PIA will be fully engaged in the legislative process, to protect the business interests of our members.

Re-authorization of TRIA

The Terrorism Risk Insurance Act is coming up for renewal. Our industry still needs assurance that terrorism insurance will continue to be available to our customers.

Extension of the Farm Bill

While the authorization for the federal crop insurance program hasn’t lapsed, the Farm Bill extension and related crop insurance reforms remain a top issue of PIA’s focus. The PIA National Crop Insurance Working Group is on it.

Natural Disaster

The extensive damage across many states caused by Tropical Cyclone Sandy could lead to renewed proposals for a federal natural disaster backstop program.

As with any issue, PIA will strongly advocate for policies and reforms that promote business and market friendly environments that advance the interest of professional insurance agents.

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