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NFIP, TRIA extensions top list of risk management issues for divided Congress

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Divided government as a result of last week’s midterm elections will not necessarily be an obstacle to agreement on key issues on the property/casualty insurance industry’s legislative agenda.

The Senate will remain in Republican control — with the GOP picking up a few seats, although the exact number remains unknown as races in Arizona and Florida have yet to be called. The House of Representatives will shift to Democratic control, although once again the size of the Democratic majority will depend on final tallies of several races in California.

Insurance issues tend not to break down along partisan lines, pointed out Nat Wienecke, senior vice president of federal government relations in the Property Casualty Insurers Association of America’s Washington office. Concerns over such legislative matters as extension and reform of the National Flood Insurance Program instead tend to follow regional lines, he noted.

And the future of the NFIP is one of the issues that the new Congress that convenes in January will have to tackle. The current Congress meeting in a lame-duck session later this month will have to deal with the NFIP or it will expire on Nov. 30. Lawmakers are expected to approve a short-term reauthorization and push consideration of any reform into the new Congress.

“We hope they will address reform as well as reauthorization,” said Frank Nutter, president of the Reinsurance Association of America in Washington. “We’re encouraged by the fact that the flood program has had bipartisan support through a number of its reauthorizations.”

Another issue of interest to risk managers and insurers is the future of the federal government’s terrorism insurance backstop initially created by the Terrorism Risk and Insurance Act of 2002, better known as TRIA. Although the program doesn’t expire until the end of 2020, previous efforts to extend it have proved to be contentious.

Joel Wood, senior vice president for government affairs at the Washington-based Council of Insurance Agents & Brokers, noted in an analysis sent to members that he is “heartened” by the initial tone of Nancy Pelosi, D-Calif., who is expected to be the next speaker of the House, in which she has emphasized finding areas of agreement. “On the commercial insurance agenda, this hopefully should include bipartisan reform of the federal flood insurance program, and reauthorization of the Terrorism Risk Insurance Act,” he said. “So on balance, it could have been worse.”

“A divided Congress with a president that seemingly thrives on division doesn’t seem to bode well for legislative progress,” said his colleague Joel Kopperud, vice president for government affairs, in the same memo. “But when I consider our issues, it’s not difficult to actually see a silver lining on reauthorizing TRIA and NFIP.”

Mr. Wood noted that the presumptive chair of the House Financial Services Committee — Rep. Maxine Waters, D-Calif. — has introduced legislation that would forgive the NFIP’s debt. “For the most part, I don’t see Republican Senate being interested in this,” he said. “If there is coalescence around the broad reauthorization of the NFIP, I think this could be on the table, but as a general matter, I think Republicans in the Senate would be loath to accept that. My caveat always is watch the coastal representatives and senators.”

Regarding TRIA, PCI’s Mr. Wienecke noted that Rep. Waters has said in the past that she would support an extension of the program.

Mr. Wienecke also said that he “would be surprised if we didn’t see House legislation on marijuana. PCI is particularly focused on getting an impairment standard for workplace and driving safety. “How high is too high to get to work or behind the wheel of a car?” he said.

He said that he also expects the House to consider a major privacy bill dealing with issues such as consumer data breaches.

And Congress may become involved again in matters concerning international insurance regulation.

RAA’s Mr. Nutter noted that the Trump administration has initiated the process for a new covered agreement with the U.K. that they are going to negotiate pending Brexit. He said that the covered agreement with the U.K. would probably replicate the agreement that exists with the EU. “Our expectation is that the change in the Congress will not change this,” he said.