The fate of federal insurance regulatory proposals could depend partly on how House Democrats decide to structure their committees.

Congress watchers usually assume that the most senior minority party member on a committee is the most likely candidate to chair the committee if party control over a chamber changes.

Sen. Max Baucus, D-Mont., is the heir presumptive to Sen. Charles Grassley, R-Iowa, the current chairman of the Senate Banking Committee, and Rep. Barney Frank, D-Mass., probably will succeed Rep. Michael Oxley, R-Ohio, as chairman of the House Financial Services Committee, which oversees the insurance and securities industries as well as the banking industry.

But the insurance and securities industries were under the jurisdiction of the House Energy and Commerce Committee up until 2001. Rep. John Dingell, D-Mich., probably will return as the head of that committee.

Proposals for insurance regulatory changes tend to be bipartisan in nature, and the results of Tuesday’s elections may not affect them much as long as Frank and Baucus retain jurisdiction, according to Michael Kerley, senior vice president of federal relations at the National Association of Insurance and Financial Advisors, Falls Church, Va.

“The overall support in the key committees, both House and Senate, remains about the same,” Kerley says. “As a result, I suspect that the issue will simply continue to percolate, and it will be a while before we will able to discern where it will go.”

But, if Dingell succeeds at getting jurisdiction over insurance regulation, “then that changes everything,” Kerley says. “[Dingell] has strongly supported a federal regulatory system for insurance in the past.”

Here are Kerley’s thoughts about other key issues:

- Health care: NAIFA members report that the cost of health insurance is rising so high it is starting to crowd out expenditures on pensions and other benefits, Kerley says.

Some Democrats want to revive talks about government-run “single-payer” programs, but Congress is likely to delay action on the most politically sensitive health care issues until after the 2008 presidential season, Kerley says.

- Estate tax repeal: “It is hard to believe that the Democrats will allow the proposal for almost full repeal that was before the Senate in early August to pass,” Kerley says. “Something less, however, could pass, something that loses perhaps 50% of the current revenues raised by the estate tax.”

- Tax reform: Kerley doubts the new Congress will even consider the Bush administration’s tax reform proposals, including a proposal to replace a variety of insurance and savings vehicles with a simplified lifetime savings account.

“I would color those ‘gone’,” Kerley says. “It seems almost impossible that a Democratically-controlled Congress would allow LSAs to be created.”

- Long term care insurance deduction: The insurance industry will have a tough time getting an above-the-line deduction for LTC premiums if the Democrats reinstall a “pay as you go” policy on tax cuts, Kerley says.

The pay/go policy would require Congress to use cost cuts or new taxes to offset the cost of any new tax breaks.

But the recently enacted Pension Protection Act includes a provision permitting insurers to combine LTC insurance with life insurance policies and annuities starting Jan. 1, 2010. That proposal should help expand access to LTC insurance coverage, Kerley says.