Lobbyist: Congressional Panels Hold Clues to Trump Insurance Moves
November 14, 2016 by Robert O'Connor
LONDON – European insurance executives trying to work out how the U.S. presidential elections might affect their industry might start by looking at the relevant congressional committees, according to Washington lobbyist Bryan R. Tackett.
“No one saw this coming,” Tackett, government relations director at law firm Drinker, Biddle & Reath, told a seminar hosted by the International Underwriting Association. The IUA draws its membership from the London company insurance market. Tackett’s speech focused on the effects of the election of Donald J. Trump as U.S. president on non-U.S. insurers and reinsurers.
To underline the surprise caused by the election result, Tackett said none of the public polls over the past 18 months had Trump leading in Wisconsin, a state he was to win.
“I would call this our version of Brexit, in a way,” Tackett said in reference to the June 23 British referendum that put the United Kingdom on track to leave the European Union. You had an electorate who felt kind of put out over the last eight years with President Obama, and they showed up in droves to vote for Donald Trump.”
Tackett, who said he was a supporter of Hillary Clinton in this year’s presidential election, described himself as a “recovering insurance broker.”
Tackett reminded the audience that insurance in the United States is regulated at the state level, with the “vast majority” of state insurance commissioners appointed by governors.
The congressional banking and financial services committees, Tackett said, deal with such areas as financial institutions, the implementation of the Dodd-Frank Act, the Federal Insurance Office, oversight of the National Flood Insurance Program and the “burgeoning” public policy issues of fintech and insurtech.
It will be necessary, Tackett said, to get a sense of the likely opinions of the chairs of these committees on the question of state vs. federal regulation. A similar test, he added, should be applied to the eventual nominee for secretary of the Treasury.
The debate about the future of the Affordable Care Act, Tackett said, will involve the health, energy and commerce committees. The Homeland Security Committee is responsible for the Federal Emergency Management Administration, he said. Any possible changes to FEMA, has implications for the National Flood Insurance Program. The Finance and Ways and Means committees, Tackett said, would have jurisdiction over trade pacts, including reinsurance cover agreements, between the United States and the European Union.
“It will be interesting to see as Trump begins to get his feet on the ground in Washington what will happen coming out of these committees,” Tackett said.
The new president’s lack of experiences with the legislative process, Tackett suggested, could mean “that the work of these committees will be what ends up becoming actual Trump policy. From my perspective the executive branch is ceding a lot of power” that has been held by the last couple of administrations.
“This is where the action is going to be,” Tackett said. “It’s not necessarily going to be coming out of the White House.”
It would be premature to say Dodd-Frank “is going to go the way of the dodo,” Tackett said. But he does expect some significant changes in federal financial services regulation. This, he added, could begin in the House Financial Services Committee, with legislation aimed directly at Dodd-Frank.
The Trump administration is also likely to seek changes in the National Flood Insurance Program, Tackett said, noting the program’s current debt of about US$23 billion. Not only would the new president be interested in managing that debt, he said, but he might also want to open that area to some extent to the private insurance market.
Thinking along these lines, Tackett said, will be influenced by the recent disasters in Louisiana, and by Hurricane Matthew, which hit the U.S. East Coast in October.
Tackett believes perceptions that Trump’s lack of preconceived notions about what to do could be good news for the insurance sector. “That opens up tremendous opportunity for the industry to go in and educate Mr. Trump and his administration,” he said.
(By Robert O’Connor, London editor: Robert.OConnor@ambest.com)
