Login Register Subscribe
Current Issue

COMMENTARY: Passions over political fights may cool over time


Who remembers the Environmental Insurance Resolution Fund? Does the Fairness in Asbestos Injury Resolution Act ring any bells? Who can forget federal insurance solvency legislation?

I don't blame you if you have forgotten these legislative initiatives between the early 1990s and mid-2000s. I'd halfway forgotten them before I had reason to go through some ancient files looking for something else. Probably only those with exceptionally long, clear memories remember much about the EIRF.

But it, like the other proposals mentioned above, was once one of the most controversial issues confronting the property/casualty insurance industry.

The EIRF came as part of a larger congressional debate over the Superfund liability framework in the early 1990s. The EIRF would have created a fund, paid for in part by new excise taxes on certain commercial insurance policies, to resolve private litigation over insurance coverage for cleaning up sites under the regulation of the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

Few issues have since proved to be so divisive for the property/casualty insurance industry. Most insurance trade groups opposed it, but the American Insurance Association supported it. But even within AIA's ranks, at least one member company publicly split with the association to oppose the measure. Industry lobbyists almost came to blows.

That was in 1994. A year later, the EIRF — over which so much passion had been expended — was a nonissue. Superfund liability reform, which had engaged the business community for years, faded in importance and dropped off legislative priority lists.

What happened? To begin with, Republicans won control of both chambers of Congress for the first time in more than a generation, and new taxes of any sort were anathema. So much for the EIRF. But as the worst of the Superfund sites were cleaned up, the liability issue itself lost its urgency.

Somewhat the same thing has slowly happened with asbestos liability. With use of the substance banned, fewer and fewer people were exposed to its potentially carcinogenic effects. While many people continue to suffer from asbestos-related diseases, their numbers shrink every year through both mortality — asbestos-related or not — and the fact that asbestos isn't being used in construction and manufacturing any more.

The property/casualty insurance industry still confronts its share of divisive issues. The relative merits of state vs. federal insurance regulation is one. The extent of the powers the Federal Insurance Office should wield is a related issue. And the question of whether certain reinsurance transactions should be subject to additional taxation is yet another.

All stir passions, although thankfully not as high as the EIRF did years ago. But I still can't help wondering if 20 years from now, a new generation will ask what the fuss was all about — if they remember the issues at all.