Industry sees Dems storm U.S. House.

Insurers and other industry players will need time to get to know the dozens of new faces coming to Congress as part of the electoral surge Nov. 7 that allowed Democrats to pick up 32 seats and control of the House of the Representatives. But when control of the U.S. House officially is handed over early next year, the members expected to take the reins of those committees that most affect the industry are already familiar faces.

While Rep. Nancy Pelosi, D-Calif., would make history as the first female Speaker of the House, Democrats are expected to turn to old hands such as veteran ranking members Barney Frank of Massachusetts, Charles Rangel of New York, and Michigan's John Conyers and John Dingell to assume the chairmanships of their respective committees.

Financial Services 

A change in the leadership of the committee with the greatest authority over insurance already was a foregone conclusion, given Rep. Michael G. Oxley's decision to retire at the conclusion of the 109th Congress. Despite the change in party control, most observers said they expect Frank's ascension to the committee's leadership to be fairly seamless, with property/casualty insurers particularly comforted by Frank's support of the Terrorism Risk insurance Extension Act.

Taking over the leadership of the subcommittee on capital markets, insurance and government-sponsored enterprises would be Rep. Paul Kanjorksi, D-Pa., who is widely expected to introduce legislation in the 110th Congress that would allow for some form of optional federal charter for insurers. However, unlike either an OFC bill introduced in the Senate earlier this year, or one proposed in the House by Rep. Ed Royce, R-Calif., Kanjorski has said in the past that his legislation would propose federal regulation only for life insurance.

As chairman, Frank also is expected to revive efforts to pass a tough data-security and identity-theft bill, as part of an overall effort by the Democratic Congress to focus on issues of privacy, offered Robert Rusbuldt, chief executive officer of the Independent Insurance Agents & Brokers of America.

"There will be more emphasis on things that are considered consumer issues," Rusbuldt said. "Things like credit scoring could be scrutinized. You might see them look at anti-redlining language in homeowners, or title insurance. Ergonomics issues in workers' comp could be back on the table."

Ways and Means 

Like Oxley, Ways and Means Chairman Bill Thomas, R-Calif., opted not to run for re-election. Fellow committee veterans Nancy Johnson, R-Conn., and Clay Shaw, R-Fla., had their choices to retire made for them, as both went down to unexpected defeats. Joining them in the losing column were fellow committee members, Reps. J.D. Hayworth, R-Ariz.; Chris Chocola, R-Ind.; and Melissa Hart, R-Pa.

Helming the committee in the 110th will be Rangel, another veteran Democrat who has waited more than 30 years for the opportunity to serve as chairman. While Rangel has said among his goals is to ensure that President Bush's tax cuts are not extended, for insurers, the committee is of interest not only for its tax-writing powers but also its jurisdiction over trade and tariffs and the Medicare program.

Addressing the latter has been named a priority by Pelosi, as well as by Rep. F. Pete Stark, D-Calif., who would be expected to take over the subcommittee on health. Pelosi and Stark have been joined by other Democrats in proposing that Medicare's Part D prescription-drug benefit be overhauled to ensure that beneficiaries do not have to contend with a "doughnut hole" coverage gap. According to Mohit Ghose, a spokesman for America's Health Insurance Plans, health insurers remain unclear on how such a program would be structured. Of particular concern to the industry is whether a "negotiated" Medicare benefit would serve as another plan, or whether it would involve abolishing Part D.

Judiciary

The originator of most pieces of tort-reform legislation over the past decade, the Judiciary Committee would see a wild swing in ideology as it passes from the leadership of outgoing Chairman James Sensenbrenner, R-Wis., to that of its veteran ranking member, Rep. John Conyers, D-Mich.

"Any kind of tort reform, you can write off for the next couple of years," Rusbuldt noted. Instead, he added, Conyers and the Judiciary Committee could choose to take up hearings or legislation on whether to revoke the limited antitrust exemption the industry enjoys under the McCarran-Ferguson Act.

Indeed, that very proposal is included in a set of recommendations put forward last month by the House Democratic Caucus Hurricane Katrina Task Force, which was chaired by a vocal industry critic, Rep. Gene Taylor, D-Miss. The report, which also proposes requiring homeowners policies to cover all perils, creating a federal backstop for major natural catastrophes and having a federal regulator provide oversight of the industry, was viewed by some as a possible preview of House Democrats' insurance agenda.

Losing Bets

Insurers took some big gambles on the 2006
election, but not all of them paid off. Among
those candidates who lost, the following
received the most in contributions from insurance
and financial political action committees.

Candidate                    State           Contributions

1. Sen. Rick Santorum        Pennsylvania        $632,845
2. Sen. Jim Talent           Missouri            $411,485
3. Sen. Mike DeWine          Ohio                $378,986
4. Rep. Sue Kelly            New York            $373,131
5. Ret. Mike Fitzpatrick     Pennsylvania        $372,996

Source: BestWeek analysis of Federal Elections Commission data