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New PCI chairman monitors federal regulatory posture

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New PCI chairman monitors federal regulatory posture

For Terrence W. Cavanaugh, a challenge facing the Property Casualty Insurers Association of America is continuing to provide effective advocacy for its members and the industry in a rapidly evolving risk landscape.

That means commercial and personal lines insurers alike, said Mr. Cavanaugh, who assumed the PCI chairmanship Tuesday during this year’s annual conference in Scottsdale, Arizona.

“Our challenge is to make sure we have the right talent and the right place to have the right discussion to promote our industry,” the president and CEO of Erie, Pennsylvania-based Erie Insurance Group said.

“We want to make sure that we protect the economy from terrorism,” whether it stems from domestic and/or foreign sources, he said. Not surprisingly, the reauthorization of the federal government’s terrorism insurance backstop program established by the Terrorism Risk Insurance Act of 2002 “is a big issue for us,” he said.

The program will lapse on Dec. 31 unless Congress reauthorizes it. The Senate has passed a measure that would extend the program for seven years, but the full House has yet to move on a bill approved by the House Financial Services Committee that would extend the program for only five years, as well as make other changes to the program.

The bills differ in other ways. Advocates of the program hope that differences will be resolved and that both houses will approve an extension during next month’s lame-duck session.

Another issue facing PCI is “the evolving role of the federal government in our business,” Mr. Cavanaugh said. PCI is trying to make sure that any federal role works for the industry and the consumer. He said the trade group seeks to assure that any federal role in the traditionally state-based regulation of insurance is “appropriate” and “promotes a sound private insurance industry.”

“If we’re an effective advocacy organization,” PCI will grow and increase its influence, he said. Mr. Cavanaugh cited looking at issues such as the proper regulation of the commercial ride-sharing industry as an example. To be an effective trade organization, PCI works to make sure that it’s a credible source of information for the industry, regulators and to some extent consumers, too.

Looking to the future, Mr. Cavanaugh said that the industry must draw talented young people to its ranks. “We sell an intangible that is sometimes difficult for new entrants in the business to comprehend,” he said.

He said that when he talks to college students and other candidates, he talks about the “diversity of jobs available,” and stresses that “we’re the glue and the grease of the economy.”

“By virtue of our balance sheets and risk transfer, we allow the organizations to remain stable,” Mr. Cavanaugh said. “Nothing happens without risk transfer. We’ve got to get that story out.”