"Plus ca change, plus c'est la meme chose," goes the old French proverb. The more things change, the more they are the same.
Will this be true of the recent shift in political power in Washington in the wake of a smashing Democratic victory in the midterm elections?
"Smashing," that is, in the sense that they wrested control of both House and Senate from the Republicans, though the margins of victory were razor thin.
Nonetheless, it was a stunning upset, one which has the insurance business abuzz over whether it spells good or ill for companies, consumers, agents and brokers.
What does it mean?
It means, for one thing, that the face of the federal legislature is changing at this writing. Some of the old Democratic warhorses are back--Ted Kennedy and Barney Frank from Massachusetts, Chris Dodd of Connecticut, New York's Charlie Rangel and the industry's old Michigan nemesis John Dingell are back in the saddle. These boys of the old brigade have left their stamp on the business in times past and could do so again.
Already, Sen. Dodd, incoming chairman of the Senate Banking Committee, has pledged to forge ahead with a permanent program to backstop insurers in the event of a terrorist attack, rather than push through a simple extension of TRIA. Meantime, Rep. Frank, the new chairman of the House Financial Services Committee, talks about a five-year extension and expansion of TRIA. Frank also favors including group life insurance in any expansion of TRIA. As for Congressman Dingell, he yearns to bring insurance under the jurisdiction of his House Energy and Commerce Committee.
There are fresh Democratic faces, notably that of Eliot Spitzer, the new governor of New York, who has been a thorn in the side of the insurance business (and a particular headache for agents and brokers). Spitzer has warned he won't forget the business and its transgressions just because he has left the state attorney general's office. We'll all be watching to see whom he names as superintendent of insurance in the Empire State.
The other huge issue of the past year, and the next, is the future of insurance regulation. Never before has the state regulatory mechanism been called into such doubt and never before has the drumbeat for some type of federal presence in insurance regulation been sounded so loudly and so insistently. Democrats, of course, unlike their Republican colleagues, are more prone to look to the federal government for solutions. The Republicans are innately states rightists and so opt for a continuation of state regulation. Look for a tilt to the optional federal charter idea, at the very least, over the next year.
The likelihood of tectonic shifts on the financial-services landscape over the next two years or so is probably minimal. But for political junkies like myself, the whole spectacle will be most interesting and, of course, entertaining.
So--whether you ask the question in French or English--will this seemingly momentous change mean a lot, or nothing at all? Remember Newt Gingrich's Contract With America after the Republican midterm "revolution" of 1994, the one meant to usher in the conservative millennium? Remember that a volatile electorate turned the rascals out in short order, even deposing the overconfident speaker himself? Will this Democratic victory be as short lived?
We'll just have to wait and see.
THOMAS J. SLATTERY, a veteran editor and writer on industry affairs for 40 years, is currently managing director of Slattery-Esterkamp Communications, of Baldwin, N.Y. He can be reached at email@example.com.
January 1, 2007
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