The Insurance Industrys
Most Powerful Man
It may surprise you to realize that the most powerful man in the insurance industry doesnt even work in the business. Rather, he is employed by a large conglomerate headquartered on the Potomac known as the federal government.
Im speaking, of course, of Rep. Michael Oxley, R-Ohio, who is the chairman of the House Financial Services Committee. Mr. Oxley has already gained some fame (some would say infamy) as the House lead sponsor of the Sarbanes-Oxley Act, passed in mid-2002 and giving headaches ever since to financial institutions all over the country.
Mr. Oxley controls the insurance regulatory agenda in the House and everyone in the insurance business knows itcompanies, agents and regulators. So, when Mr. Oxley speaks, people in the business listen, hanging on his every word. And even if its not quite clear what Mr. Oxley is prescribing, praise for his wisdom follows, even as heads are scratched.
Mr. Oxley did speak at a closed session of commissioners at the spring meeting of the National Association of Insurance Commissioners last month in New York where he lightly sketched concepts for a state-federal partnership in the insurance regulation area. By all accounts it was fairly vague and a long, long way from any kind of language needed for legislation.
Nonetheless, the requisite effusiveness surfaced without fail. Indeed, it was almost comical to see how quickly various players fell into line in support of Mr. Oxleys musings. It was like watching dominoes cascading.
Needless to say, state insurance regulators were immensely relieved to hear that the chairman is not contemplating a federal takeover, dual regulation or even a federal charter option. His words essentially spelled two of the sweetest words in the language–job security.
The big agent associations have fallen in line behind the chairman. The Big “I” on the property-casualty side because his ideas are close to what theyve wanted all along; and the National Association of Insurance and Financial Advisors on the life side because the chairmans words allow them to wave the flag of how truly and strongly they support state regulation.
On the life insurance side of the business, only the American Council of Life Insurers demurred. The ACLIs senior vice president Gary Hughes told National Underwriter shortly after Mr. Oxleys speech in New York that the ACLI had many questions about the concepts put forth. One of those questions was just how workable would the chairmans ideas be without any enforcement mechanism.
One of the things about not agreeing with powerful men is that they tend to get pissed off if you dont see things their way. So, in the first (and maybe last) hearing on the issue of Mr. Oxleys committee, on March 31, the life insurance business was conspicuous by its absence from the list of those giving testimony. There were commissioners, there were property & casualty groups. Mr. Oxley even made time for consumer gadfly Bob Hunter, for goodness sake. Yet the ACLI was out in the cold.
You can draw your own conclusions about what I am sure was only an oversight; simply a crack big enough, so to speak, for the largest life insurance company association to fall through.
Yet we would encourage the ACLI to stand its ground. It has very valid reasons for supporting an optional federal charter and the chairmans concepts dont make those reasons any less compelling. It will have to find a way to deal with his pique, however.
Reproduced from National Underwriter Edition, April 2, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.