How will 2022 election results impact P&C insurance?

From big federal questions to state-level policy, what happens at the polls tends to find its way to the insurance world.

Big proposals to dismantle the Affordable Care Act likely won’t see the light of day. (cbies/Adobe Stock)

With Election Day 2022 behind us, insurance professionals are now taking a look at what the results might mean for the industry moving forward.

On the biggest stage, control of the federal government has shifted to a divided government model, which could have insurance implications. But for most things insurance, control at the state level is where most of the decisions are made.

Divided federal government

Republicans flipped the House of Representatives from Democratic control. What that means for the insurance industry is that big proposals to dismantle the Affordable Care Act likely won’t see the light of day. Instead, all eyes should be on the committee structures.

With Republicans in control, they will take the gavel of the Financial Services Committee, which is charged with some oversight of the insurance industry.

Across the Capitol Building, even though the Senate stays in Democratic control, with the retirement of Sen. Pat Toomey, R-Pa., the Senate Banking Committee is going to get a new top Republican. That’s another committee with insurance oversight duties.

Federal involvement with the COVID reimbursements is likely to be a hot topic of debate. But the biggest question likely to come up on the federal level regarding insurance is the National Flood Insurance Program.

The federally backed insurance program recently changed to a premium modeling system called Risk Rating 2.0, which has drawn bipartisan backlash in many flood-prone states.

Risk Rating 2.0 was intended to bring flood insurance premiums more in line with the actual risks for each policy, but the end result is many customers received bills many times their original policy cost. Whether there is enough bipartisan common ground to move any changes to the program through the legislative process remains to be seen.

What’s happening at the state level/?

The politicians most associated with the insurance industry are the insurance commissioners in each state. This year, four state insurance commissioners were on the ballot, all of whom were re-elected.

The state of Florida has been synonymous with uncertainty in the insurance market in the past 18 months or so, with more than a half dozen insurance companies either being declared insolvent or ceasing to write policies.

Gov. Ron DeSantis has called for another special session of the legislature focused on insurance. This session follows a previous one held in May, which added $2 billion to back private insurers and introduced bills aimed at reducing the litigation surrounding roofing claims.

The recently elected state legislators will lend their voices to those conversations on how the state continues to try to stabilize its insurance market.

For his part, Florida Chief Financial Officer Jimmy Patronis won re-election. Patronis has proposed legislative changes around contractors directly assuming homeowner’s insurance benefits — a practice blamed for a ballooning number of lawsuits. He also proposed a special prosecutor to combat insurance fraud.

In South Dakota, voters passed a constitutional amendment expanding Medicaid so it covers people with incomes below 138% of the poverty line — about 42,000 people.

In Kansas, recently re-elected Democratic Gov. Laura Kelly said in her victory speech she wants to work with the Kansas legislature to also expand Medicaid.

In Arizona, voters passed a state proposition governing the rules around medical debt collection and interest rates for medical debt.

One of the hottest-button issues in the election was around reproductive rights. And while insurance coverage for abortion varies widely and is not required by law, several states moved to ensure it remains available.

California, Michigan and Vermont approved ballot measures protecting abortion rights. And Kentucky voters declined to pass a constitutional amendment that would have cut access to abortion, even though it already has state laws restricting access.

What’s on the horizon?

Although there weren’t a lot of clear-cut results from the election to immediately reverberate around the insurance industry, many of the candidates and initiatives chosen by voters likely will have an impact.

From big-picture federal questions to state-level policies, what happens in the ballot box tends to find its way into insurance policies.

Michael Giusti, MBA, is a senior writer and analyst for InsuranceQuotes.com.

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