A survey released last Monday by an accounting firm said retail companies expect their same-store sales for the Christmas season to decline this year compared to last year. They also plan more discounting, and expect that discounters will do well.
The situation for insurance companies and agents, however, is more complicated.
That is because starting Wednesday, with the election of a new president, official Washington will start work on developing a new regulatory scheme for financial institutions.
And, given past history, by Christmas the broad outlines of a bill could be etched in stone. In other words, a survey of insurance lobbyists gives no clear consensus as to whether they will find the equivalent of gold or diamonds–or a shopping spree at the Minneapolis branch of Saks–in their stockings Christmas morning, or a lump of coal.
By the way, as an op-ed piece in last week’s Washington Post by New York Life president and CEO Ted Mathes implied, principles-based reserve accounting, appears “deader than a doornail,” in the words of one experienced industry lobbyist.
In other words, all the material advocating it might be on clearance at your nearby discount store.
The stakes for insurers and agents over the next few critical weeks are enormous. Since the start of the Republic in 1789 insurance has been state-regulated. And, in both 1945 and 1999, Congress restated the supremacy of states in regulating life and property-casualty activities.
That, according to everyone in official Washington, is about to end.
For example, the decision by the life insurance industry to ask Treasury to allow some of its members to participate in the Troubled Asset Relief Program and other parts of the Emergency Economic Stabilization Act of 2008 “absolutely guarantees” a federal role for insurance in the future, according to one industry lobbyist.
“There will be strings attached [to the aid],” the lobbyist said. “It’s absolutely the deal on an optional federal charter, and pulls the needle to the end of the meter on an Office of Insurance Information,” he added.
“Congress will demand it,” he said. “They want regulators to actively monitor the recipients of aid to ensure the money is appropriately spent,” and to do that, he explained, “federal regulators need expertise in insurance issues.”
In effect, he argued, it creates a federal Office of Insurance oversight.