Republican Sweep Of Congress Gives Industry Issues A Boost
Retirement security and pension issues important to the life insurance industry got a boost by the Republican sweep of Congress, industry representatives say.
But at the same time, the change in control of the Senate could also enhance President Bushs desire to permanently repeal the estate tax, they say.
Phil Anderson, senior vice president of government relations with the American Council of Life Insurers, says Republican control of Congress for at least the next two years offers great opportunities, but also challenges for life insurers.
Many major themes advanced by Republicans, Anderson says, such as retirement security and individual responsibility, are also important to life insurers.
The challenge for the industry, he says, is to demonstrate that life insurance is the lone industry that can offer products that guarantee income for life.
On estate tax repeal, Anderson says he expects to see a renewed effort to make repeal permanent. (Under current law, the estate tax will phase out on Jan. 1, 2010, but come back into being as it existed in the year 2000 on Jan. 1, 2011.)
However, David Winston, vice president of government affairs with the National Association of Insurance and Financial Advisors, believes that repeal is still unlikely.
In effect, he says, repeal will still need 60 votes in the Senate to prevail. Winston says he believes Senate Democrats will become unified in their opposition to permanent repeal.
Tom Korb, director of government affairs for the Association for Advanced Life Underwriting, Falls Church, Va., agrees.
While the margin favoring repeal will tighten, he notes that in 2001, the Republicans also controlled the Senate. Even then, Korb says, 60 Senators were not ready to vote in favor of a permanent tax package. Based on the initial examination, he adds, it again does not appear that there are 60 votes in favor of permanent repeal following this election.
“Republicans clearly will bring up permanent repeal,” Winston says, “but I still dont think it will succeed in this environment.”
Korb says the results of the vote demonstrate why AALU prefers estate tax reform.
This is the third time in three years that control of the Senate has changed hands, he says, but people have to be able to plan their estates. “Political winds blow in different directions but the need to plan is constant.”