By Arthur D. Postal
Several weeks ago, a public relations firm associated with the life insurance industry alerted the media to a “growing fight among [insurance] agents” over support for legislation that would create an optional federal charter for life insurers.
The timing of the campaign is linked to the drafting of legislation by the staff of the House Financial Services Committee that would establish “federal standards” for state insurance regulation–a moderate step that has broad support from all areas of the insurance industry.
When the life insurance industry’s latest campaign for an OFC for life carriers was launched in June, it was aimed at winning support starting in the Senate Banking Committee.
But the latest effort–the so-called “rift” initiative–is designed to climax with introduction of an amendment to the federal standards bill establishing a federal charter option for life insurers when and if the legislation is marked up in the House Financial Services Committee this fall.
Partly, the “rift” effort was organized because the life insurance industry has had difficulty gaining co-sponsors for its bill in the Senate Banking Committee beyond the original core of Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D.
Presumably, the “rift” release from Levick Strategic Communications, LLC, in Washington, D.C. is an effort to get the media involved in the initiative, and to therefore write articles talking about a “rift” within the agent community that would give members of Congress political cover to support the calls for an OFC.
While the American Council of Life Insurers distanced itself from the release, the ACLI, the American Bankers Insurance Association and the Financial Services Roundtable are all involved in the latest initiative for an OFC for life insurers.
The release selects the Independent Insurance Agents & Brokers of America for particular scorn, charging that “the Big I is trying to squash this growing movement and maintain the status quo.”
This raises a number of issues.
o First, the IIABA represents the property-casualty industry, not the life side of the business.
o Second, the Big I denies any discord within its ranks over its federal lobbying policies. “There is no truth whatsoever to the allegation made by the so-called group ‘Agents for Change’ that there is a rift in the independent insurance agent community regarding insurance regulatory reform,” said Charles Symington, senior vice president of government affairs and federal relations.