Texas State Rep. Craig Eiland, D-Galveston, a former president of the National Conference of Insurance Legislators, agreed with Mr. Csiszar, recalling one contribution of $250 from an insurance company. He said in jest that if the insurer “was in this bad a shape,” he felt he did not want to make their condition worse. “So, I never cashed [the check]. I still have it till this day.”

Rep. Eiland stressed that with so much emphasis on national issues after Democrats took control of Congress, it is worth remembering that critical insurance issues will also be decided in statehouses next year.

In his Gulf Coast town of Galveston, property rates are the big issue, Rep. Eiland said, noting that State Farm has pulled out of that market, forcing many policyholders to find new companies.

Reinsurance costs have figured primarily in the rate hikes, he added. “Perhaps we should look at how those prices are set, or perhaps not let the insurers funnel those costs back to the policyholders since it was their choice,” he said.

Also in that regard, he said, the individual states may have to deal with whether foreign reinsurers must post collateral if the NAIC fails to make any progress on the issue at its annual winter meeting next month.

If alien reinsurers have greater access to the U.S. market, Rep. Eiland said he feels that ultimately could help ease property prices. (The NAIC is discussing a collateral proposal to install some sort of financial rating system for alien reinsurers. See NU's Nov. 20 edition for details.)

Meanwhile, the Democratic takeover of Congress will not result in a major impact on the property-casualty insurance sector, a leading trade group representative believes. “We don't expect a seismic shift,” said Marc Racicot, president of the American Insurance Association.

Sen. Chris Dodd, D-Conn., will take over as Banking Committee chair, where his strong support of the Terrorism Risk Insurance Act should serve the industry well as the federal reinsurance backstop is due to expire at the end of next year, he noted.

However, lobbying efforts on civil litigation reform will switch from proactive to defensive, while attempts to repeal McCarran-Ferguson's federal antitrust exemption may gain new currency, said Mr. Racicot, a former governor of Montana who has chaired both the Republican National Committee as well as President George W. Bush's reelection committee.

The industry's likelihood of not only an underwriting gain but of record overall profits this year will be a public relations challenge when many policyholders are facing soaring property rates, Mr. Racicot warned. “This fundamental lack of understanding of insurance industry finances can be frustrating,” he said.

New York Insurance Superintendent Howard Mills, a Republican who has said he will resign next month before the January takeover by a Democratic governor (state Attorney General Eliot Spitzer), made the case for either an extension of TRIA, or better yet, establishment of a permanent backstop for terrorism risk.

“To those who say there should be a market solution [on terrorism], I say there will be one, but you will not like it,” he said. “Insurers will just walk away from the risk” if TRIA is allowed to expire.

While the AIA's Mr. Racicot made the case for an optional federal charter bill, Mr. Mills was unwilling to go that far, calling only for some sort of “federal voice” for the p-c industry and some new federal-state hybrid regulatory scheme.

Mr. Mills also said the new Congress might take a fresh look at the issue of tax-free reserving, which has been a nonstarter in the House for the past several years.

Both Mr. Racicot and Mr. Mills came out against a proposed national backstop for mega-catastrophe risks. Mr. Racicot said such programs end up discouraging the kind of activities–such as building code and flood zone enforcement–that are the keys to solving the problem.