A year of hurdles and triumphs for WSIA's Legislative Committee
COVID-19 may have shifted the focus of WSIA’s legislative efforts, but the pandemic never detracted from the group's core mission.
If you were to ask Keri Kish in January about what legislative priorities were top-of-mind for her this year, the COVID-19 pandemic wouldn’t be on her list.
The onset of the global health crisis not only shifted the focus of the insurance industry but also of the Wholesale & Specialty Insurance Association (WSIA). Its Legislative Advocacy team and Legislative Committee work directly with state and federal regulators and lawmakers to represent WSIA members’ interests and promote the wholesale, specialty and surplus lines industry.
Kish serves as WSIA’s director of government relations.
“COVID-19 completely changed our focus,” she said. “At the state level, what became our main priority was tracking what each state insurance department and each state legislature were doing to address the pandemic. Specifically, what they were going to require from the insurance industry.”
Early on in the crisis, the WSIA board of directors adopted policy positions on COVID-19-related regulatory and legislative responses to use as guidelines in monitoring activity and identifying concerns. One of the first issues to emerge were states’ proposals that would retroactively apply business interruption insurance coverage. “We very actively made it known that we were opposed to [those policies],” said Kish, “and soon we started seeing similar proposals at the federal level.”
WSIA is currently reviewing a few proposals, including the Pandemic Risk Insurance Act (PRIA), the APCIA-NAMIC-Big I Business Continuity Protection Plan (BCPP) proposal and Chubb’s Pandemic Business Interruption Program proposal, that address how the industry and government may work through the next pandemic.
“You have two schools of thought from those proposals: pandemics are uninsurable, and pandemics are insurable to some respect,” explained Kish. “We are working to figure out what we think is the appropriate balance with all of those. We’re talking to Congress members to see what they think is appropriate and speaking with our members to understand what they feel comfortable with. However, we anticipate that [these proposals] will not be addressed until the beginning of the next Congress.”
Activity beyond COVID-19
Despite the coronavirus, there are several other legislative priorities WSIA is pursuing this year, including the simplification of nonresident producer licensing. In 2015, the National Association of Registered Agents and Brokers (NARAB) was adopted to implement national standards and uniformity for nonresident producer licensing while maintaining state-based regulation and home state authority. However, five years later, the agency is still not operational. “The NARAB board must be nominated by the president and approved by the Senate Banking Committee; we still have not gotten that up and running yet. But that is an area that can still be a focus of our work, even with everything going on with COVID-19,” said Kish.
Other federal activities on WSIA’s radar this year include maintaining the Nonadmitted and Reinsurance Reform Act (NRRA) and reforms to the National Flood Insurance Program (NFIP) and private flood insurance. WSIA is presently advocating for a long term reauthorization of the NFIP as well as a clarification to the definition of private flood insurance included in the Biggert-Waters Flood Insurance Reform Act of 2012.
Looking back at 2020 successes
Possibly the greatest reward for the WSIA Legislative Committee is when members see their efforts catalyze advancements in the surplus line industry.
One of the most significant changes to the market in decades occurred earlier this year when Florida became the final state to eliminate the inconsistent treatment of home state taxation in compliance with the NRRA, said Kish. The NRRA, which passed in 2010, establishes the insured’s home state is solely responsible for the regulation and taxation of a surplus lines transaction.
WSIA also successfully deregulated broker policy fee caps in Florida and Michigan within the past two years, allowing surplus line brokers to charge a fair and reasonable amount for their services. “That was yet another big win — something our members desired to see change for many, many years,” said Kish.
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