A Message from PIA's President
August 2010
The late comedienne Gilda Radner did a routine in which she played a fictional news commentator named Roseanne Roseannadanna. At the end of each humorous commentary on the news, “Roseanne” would always end in frustration with the phrase, “It just goes to show you, it’s always something!”
When dealing with Congress in our continuing efforts to protect the interests of professional insurance agents it is, in fact, always something. Just when you think an issue has finally been settled to the advantage of agents, defeated opponents regroup and make another run at getting what they want.
In this issue of PIA Connection, you’ll read about plans by the advocates of so-called “optional federal charters” to get Congress to approve them in 2011. PIA has fought this idea before and will do so again next year.
Optional Federal Charters would let insurance companies choose whether they want to be regulated by state insurance regulators, or by the federal government. There are many reasons why federal regulation of insurance is a bad idea, which I won’t repeat here because there’s not enough space. The bottom line is that an OFC is another step in the attempt to transfer the regulation of insurance from the states to the federal government.
This idea keeps coming up because there’s a lot of money at stake. It is supported by big banks, major brokerage firms and a handful of large carriers, all of whom stand to benefit from the kind of weaker, more liberal regulation that has characterized federal supervision of financial services in recent years. In contrast, the more conservative supervision of the business of insurance by the states protected our industry during the financial meltdown. Federal regulation failed, while state regulation worked well.
But lingering support for optional federal charters means this issue will get a full airing again in Congress next year. In the face of this, PIA will remain steadfast in support of state regulation of insurance and in opposition to federal encroachment.
Another issue that is being brought up after it has been settled is the issue of contingent commissions. Starting in 2004, PIA took a leadership role in defending the right of carriers to compensate their producers as they see fit and agents to receive such compensation. Over the years, PIA filed court briefs in defense of common sense compensation, in addition to making our case in the court of public opinion. The judicial system ultimately yielded decisions saying there is nothing improper about contingent compensation. But now, some have again put forth an assertion that contingents are an inherent conflict of interest.
In this issue of PIA Connection, you’ll read an excellent article addressing this issue, written by PIA National Immediate Past President Kenneth R. Auerbach, Esq., which was also published in the National Underwriter.
Whether it is the benefits of purdent state insurance regulation, or the appropriateness of contingent commissions – or a host of other issues – things that seem settled to the advantage of professional independent insurance agents are often at risk of becoming unsettled again. That’s why PIA must remain vigilant to protect our members’ interests.
Like they say, it’s always something.
Jon D. Spalding
President
PIA National