PIA of Louisiana's 72nd Annual Convention
July 25-28, 2015 • Perdido Beach Resort
Orange Beach, AL
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New Makeup of Congress to Affect Insurance Issues

The National Association of Professional Insurance Agents (PIA) congratulates the winners in the midterm elections and looks forward to Congress making progress in dealing with important insurance issues.

"The voters have spoken and as a result, new opportunities may open up for legislative action that will have an impact on insurance issues," said PIA National Executive Vice President & CEO Mike Becker. "PIA encourages the House GOP leadership to schedule action on a long-term extension of the Terrorism Risk Insurance Act (TRIA) during the upcoming lame-duck session. "Also awaiting passage is the National Association of Registered Agents and Brokers (NARAB II)."

"In addition, we look forward to Congress passing the Insurance Capital Standards Clarification Act (S.2270) by Sen. Susan Collins (R-Maine), which would clarify that the Federal Reserve should regulate insurance companies differently than banks," Becker said. PIA supports the so-called Collins Amendment fix as a common-sense solution and will continue to work with Congress to urge its enactment during the lame-duck session.

"The GOP takeover in the Senate will result in a shift of legislative priorities," said PIA National Director of Federal Affairs Jon Gentile. "Issues that may now move to the forefront include efforts to repeal or significantly alter the Affordable Care Act (ACA), changing aspects of the Dodd-Frank Act and the potential for tax reform. Such initiatives, however, face the realistic prospect of vetoes by President Obama."

The lame-duck session is scheduled to begin on Nov. 12 and will likely last through Dec. 12. The insurance industry provisions are likely to be included in the Continuing Resolution (CR) Congress must pass to keep the government funded until March 15.

Impact at State Level of the Elections is Less Clear

The possible impact of the Republican wave of victories on insurance regulation at the state level is less clear at this point. The makeup of the National Association of Insurance Commissioners (NAIC) could be affected by changes in governorships. Several states where the governor appoints the insurance commissioner saw GOP challengers defeat Democratic incumbents, including Maryland, Arkansas and Illinois.

Democrats did pick up the governor's office in Pennsylvania, with Tom Wolf's win over incumbent Gov. Tom Corbett. That has the potential of ending Michael Consedine's tenure as Pennsylvania Insurance Commissioner; however, observers note that Consedine has a high profile on international regulatory issues and is in line to become NAIC president.

Connecticut's Democratic Gov. Dannel Malloy turned back a strong GOP challenge, thus solidifying the position of Insurance Commissioner Thomas Leonardi. Leonardi has been active at the NAIC on international matters and, like Consedine, he has been an outspoken supporter of state regulation of insurance.

Observers say it is possible that the new Republican majority will attempt to restrict the Federal Insurance Office (FIO). Industry representatives say lawmakers may push back against the FIO's authority to preempt a state insurance law if it feels the law creates "less favorable treatment" for a non-U.S. insurer subject to a covered agreement than a U.S. insurer.

A repeal of the Affordable Care Act (ACA) is not going to happen. When close races and runoffs are decided, the most votes the Republicans will have in the Senate is 54, versus 46 for the Democrats. Because of Senate rules, 60 votes will still be required to pass legislation, or get it to the Senate floor. If a repeal were to pass, President Obama would veto it. As for tweaks to Obamacare, six Democrats would have to vote with Republicans for any changes to pass, which would then be subject to a presidential veto. From a practical standpoint, by the time the new senators take office there may be 13 million Americans covered under the ACA. Taking away benefits that already exist is politically a non-starter.

GOP Control May Help Industry Aims (Insurance News Network 11/5/14)
Senate Sweep Won't Make ACA Changes Easy (Insurance Broadcasting 11/5/14)
Upcoming PIA Events
12/02/2014 -- North Shore Chapter Christmas Party & Installation

12/02/2014 -- Northeast Chapter Christmas Party and Installation

12/05/2014 -- New Orleans Chapter Christmas Party & Installation

12/11/2014 -- Northwest Chapter Christmas Social

12/11/2014 -- YIP HoliDAY at the Races Sponsorship Opportunities

12/11/2014 -- YIPs HoliDay at the Races

12/16/2014 -- Acadiana Chapter Christmas Party

12/17/2014 -- PIA of Baton Rouge Christmas Party & Installation

01/07/2015 -- New Orleans Chapter Meeting

01/21/2015 -- 1752 Club Annual Meeting

Virtual Exhibit Hall

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Virtual Exhibit Hall

Hurricane Relief Center
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Hurricane Relief Center

Commercial P/C Rates Up One Percent in October

MarketScout reports that commercial property and casualty insurance rates increased 1 percent in October, and commercial auto insurance had the largest increase of 3 percent. Among all industry classes, contractors experienced the largest increase of 3 percent on average. Smaller accounts experienced larger increases, averaging 2 percent, while large accounts saw relatively flat pricing. As has generally been the case in recent years, the smaller the account, the larger the rate of increase, with the smallest accounts reporting two percent rate increases while the largest remained flat.

"As expected, the U.S. composite commercial rate continues its slow slide," said MarketScout CEO Richard Kerr in a statement. "We are almost completely past hurricane season, so we expect continued pressure on property rates. Workers' compensation rates are also down from last month; however, a few large insurers could be facing some challenges on their comp book. If so, this could moderate the slide in W/C premiums."

What It Means to Agents: These are October numbers only and are an overall, countrywide averaging. Individual agency experiences will differ. However, in looking at the different data points as a whole, a continuing trend is the cost-effect that the "contractor classes" have across the C/L auto, W/C and small-to-mid-sized accounts areas. It is also too soon to detect what rating adjustments insurers may need to make in response to continuing cyber-related events, which are expected to impact across multiple liability covers.

FACI Discusses Cyber, Auto Affordability,
International Standards

On November 6, 2014, the Federal Advisory Committee on Insurance (FACI), an advisory body to the Federal Insurance Office (FIO), met in Washington, D.C. The committee heard from the National Institute of Standards and Technology (NIST) on the current status of a cybersecurity framework being developed pursuant to a 2013 Presidential Order. NIST is working with multiple stakeholders globally, including the insurance industry, to develop the framework. Zurich N.A. also presented to the committee on the underwriting challenges for insurers who provide cyber insurance, such as difficulties in understanding the full scope of exposure and the lack of actuarial data.

The Consumer Federation of America (CFA) told the committee that there are serious concerns whether auto insurance is affordable for low and moderate income Americans. The CFA urged the FIO to more aggressively collect data to monitor affordability. In April 2014, the FIO released a request for comment relating to its authority to monitor the affordability of auto insurance. Birny Birnbaum, the Chair of FACI's subcommittee on auto insurance affordability, supported CFA's request.

The FIO, the Federal Reserve and state insurance commissioners are working collectively on a U.S. capital standards proposal to address the unique needs of the U.S. insurance market in forthcoming international capital standards. FIO Director Michael McRaith stated that any international standards must be capable of being implemented without disrupting the U.S. market. FACI is also creating a subcommittee to examine domestic prudential issues and look at where there may be gaps in state insurance regulation. The subcommittee will be chaired by Ted Mathas of New York Life.

Questions regarding FACI can be directed to Jennifer Webb, PIA National Counsel & Director of Regulatory Affairs at jennwe@pianet.org.

PIA Member Webinar — Learn How PIA
Can Help You Sell More Flood Insurance

Floods can happen anywhere… are your clients prepared? PIA's exclusive new tool makes it easy to quote flood — and sell more policies — right on your agency's website.

On Wednesday, November 12, 2014, PIA is holding a FREE WEBINAR so you can learn all about Floodbroker.com and what it can do for your agency's growth potential. Evan Spindelman, Floodbroker.com president, will discuss the program interface and illustrate how easy it is to use. The Webinar will conclude with an open Q&A session.

Register: Join us Wednesday, November 12, 2014, at 2 p.m. Eastern. Space is limited, so register today: https://attendee.gotowebinar.com/rt/6046163122827464193

Here are 3 more ways to learn about this new PIA member-only tool:
  1. Have a Floodbroker.com representative contact you. http://piafloodbroker.viprespond.com/)

  2. Contact Evan Spindelman of Floodbroker.com at 855-442-4130 or evan.spindelman@floodbroker.com

  3. Visit PIA National's website. http://www.pianet.com/floodbroker)

Thanks to Our 2014 PIA Partners:

Americas Insurance Company

American Strategic Insurance (ASI)

Capital Premium Financing

Markel FirstComp

LCTA Workers' Comp

LUBA Workers' Comp

Prime Rate

Stonetrust Commercial Ins. Co.

VIP Software