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OPINION: Good and bad news in 2011


2011 WAS A YEAR of positives and negatives for risk and benefit managers. For risk managers looking for certainty, the year definitely was a positive one with coverage in most commercial lines available at limits that employers needed and without dramatic price swings, though the wave of natural disasters has started to put pressure on rates.

In the alternative risk market, a positive was New Jersey's passage of legislation to allow the formation of captives in the Garden State, giving captive sponsors yet another domicile choice.

On the negative side, there was no progress in moving legislation to expand the Liability Risk Retention Act so risk retention groups can be used to fund property risks. We have yet to hear of a single credible argument against such an expansion, so the congressional inaction is disappointing.

A positive development was naming Michael McRaith, the highly regarded director of the Illinois Department of Insurance, to head the Federal Insurance Office. His experience and good judgment will be invaluable for an office that advises federal authorities on insurance issues.

Another solid appointment was naming S. Roy Woodall, a respected insurance regulator, to serve as a voting member on the Financial Stability Oversight Council, which oversees the regulation of financial services institutions.

But back on the negative side, we were disappointed that Congress couldn't agree on a long-term extension of the National Flood Insurance Program, creating uncertainty on the future of that program.

On the benefits side, much of the news—generally positive—involved the health care reform law. For example, we welcomed the congressional axing of a provision that would have required employers, in certain situations, to provide lower-wage employees with company-paid vouchers to buy health insurance coverage in state insurance exchanges. The administrative complexity far outweighed any potential good.

Certainly welcome news was last month's decision by the U.S. Supreme Court to review the constitutionality of the individual mandate and possibly the entire law.

However one feels about the law, few would disagree that it is in the national interest to know whether the law passes constitutional muster before key provisions kick in.