SIMPLE, SUPPORTABLE MESSAGES WORK BEST

Getting your message heard in legislative and regulatory arenas can be a difficult task. The American Insurance Assn. has actively pursued reforms and other measures in both of those areas, in all 50 states and on Capitol Hill.

Through the years, the association has effectively persuaded legislators and regulators to listen to our message and act on our recommendations. What we've learned is that our most effective legislative strategies pursue reasonable goals. The best messages are simple, concise, supportable by facts and delivered by someone with credibility.

In our dealings with legislators and regulators, AIA's message is always the same: Competition is better. The method of delivery may change, as may local tactics, but the underlying theme -- the core philosophy -- remains. Regulations and laws should be crafted to stimulate competition and encourage the development of mature insurance marketplaces. If there's anything history has shown, it's that competition makes people work harder, think smarter and be more productive. It also results in fairer prices for consumers.

Most insurance executives would agree that the insurance industry is the most heavily regulated private business in existence. Too little of that regulation inspires competition. In the name of protecting consumers, it places a heavy burden on insurance providers and ends up making the products less innovative and more expensive. Over the years, the AIA has been a staunch advocate of state-by-state regulatory reform and has worked to pass numerous pieces of legislation. During that time, some lobbying principles have emerged.

First, define clear objectives. It's obvious but sometimes overlooked: You have to know what to ask for to get what you want. Over the past three years, the AIA has led efforts in more than 20 states to identify and reform antiquated insurance laws and regulations. Many of these rules were implemented at a time when most insurance purchases were local. Now, numerous insurers have interstate and international customers. The AIA's efforts are aimed at keeping the regulatory environment in step with the marketplace. A primary target has been price controls on commercial lines of insurance. This year, the AIA focused on eight states (Massachusetts, New Hampshire, New York, Pennsylvania, Arkansas, Alaska, California and Oklahoma) to change their systems from regulator-dependent to market-dependent. In each of these states, regulators must approve rates insurers charge their customers. This relegates insurance pricing to the government. Imagine the government setting prices on automobiles. Or personal computers. Or ground beef.

One of the most important aspects of a legislative or regulatory effort is that the message be clear, concise and consistent. With insurance, it's sometimes difficult to take the reams of technical information and boil it down to plain English. But it has to be done. Legislators deal with countless issues and myriad proposals. They don't have time to study the nuances and intricate details of every item that comes across their desks. It's the advocate's job to present the information in a form the legislator or regulator can understand, digest and act on.

It's also essential that the message be supportable by the facts. The AIA uses its legal department and a professional research team to ensure that our positions are supported by real-world activity. That's actually a part of our goal-setting process. Equally important, information should be absorbed by the association representatives who deal with legislators and their staffs, and the news media. When the inevitable request for a detailed explanation occurs, the spokesperson must be ready.

Making use of local resources also is important to getting your message heard. Part of this is identifying elected officials philosophically aligned with your position and establishing a continuing relationship. Through the years, the AIA has found that the most effective messengers are people already in the community. They're also the best at identifying legislative and regulatory allies. In addition to seven regional offices and an office in Washington, AIA has lobbyists and counsel in all 50 states. This presence has helped us establish unique relationships with legislators and regulators, as well as find other sources to increase support locally.

Another resource, often underused, is the insurance company representative. These representatives don't always have to be chief executive officers or company presidents. Many times, the most effective representative is a branch manager who can discuss how the proposed legislation or regulatory reform will affect his or her day-to-day operations. Insurance agents also have proved to be willing and persuasive advocates. Other times, in carefully selected situations, a face-to-face conversation between CEOs and legislative leaders and governors has tremendous impact.

It's also critical to develop alliances within the non-insurance business community. A variety of businesses are interested in controlling their workers compensation expenses, for example, and have led reform efforts in many states. Doing your homework, which is important in setting goals and message development, also can help recruit other businesses by demonstrating the effect a proposed regulatory change would have on that company's insurance premiums. For many companies, insurance is a major expense. They're always willing to help in the lobbying effort if it means their insurance dollars are spent more wisely and not wasted on inefficient regulation.

Success in the legislative arena also requires setting realistic goals. At the AIA, we try not to chase unrealistic objectives, which can waste valuable time and resources. Instead we focus on an aggressive agenda designed to improve our members' balance sheets. Our goal is to give our member companies a return on the dues they pay us. With the vast array of special interest groups involved in the political process, universal support for a proposal is unlikely. Staking out logical positions, supported by data, lends credibility and helps get proposals passed. It also might help defuse the worst elements of a measure harmful to industry interests.

Perhaps most importantly, those within the insurance industry must be willing to get in the trenches and fight for the type of legislative and regulatory environment needed. The reason trial lawyers and consumer groups are successful is that they're organized, aggressive and committed. While some insurance companies also have developed mechanisms that encourage employee participation in the political process, the industry as a whole will enhance its ability to pursue its agenda if more companies become involved.

Like many industries, there is much diversity in the insurance world, which can sometimes lead to division. The AIA realizes the importance of a unified industry and works with non-members and other industry organizations to ensure a united front. The industry enjoys its greatest success when it works together on issues.

Over the years, the methods of communicating messages to policy-makers may have changed, but the goals haven't. The AIA's stated mission is to lead the property/casualty industry in the public policy arena and to create a political and regulatory climate that enhances the industry's financial security and global competitiveness. With the commitment of ample resources and a unified industry message that is communicated effectively to regulators and legislators, these goals will be accomplished.

Joseph A. DiGiovanni is senior vp-government affairs for the American Insurance Assn. in Washington.