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January 6, 2010 Wednesday 03:10 PM EST
U.S. Sen. Dodd’s Legacy Might Be 2010 Financial Services Reform
Jesse A Hamilton
Chris Dodd, the powerful Connecticut senator and central figure in a number of insurance industry reforms pending in this congressional session, will not run again for the seat he’s held for almost three decades.
“In the long sweep of American history, there are moments for each elected public official to step aside and let someone else step up,” said Dodd, who has been beset by a series of controversies and has been suffering in early election polling. “This is my time to step aside.”
Among the most senior Democrats in the Senate, Dodd is chairman of the Banking, Housing and Urban Affairs Committee, in which the details of a massive financial reform package are still being negotiated. He was also hand-picked by Sen. Edward Kennedy, his closest friend in the Senate, to champion the Senate’s health care reform bill as Kennedy succumbed to terminal cancer. Both bills are still subject to debate and require some lawmaker compromises before final passage, putting him — as Dodd described it — “at the center of the two most important issues of our time.”
The longest-serving senator in Connecticut’s history, Dodd had followed in the footsteps of his father, Sen. Thomas J. Dodd, and had even made a short failed run in the 2008 presidential election before endorsing then-Sen. Barack Obama. But Dodd had subsequently been the focus of a series of recent controversies — some regarding his personal finances and others the performance of his Senate duties.
Jimi Grande, senior vice president for federal and political affairs with the National Association of Mutual Insurance Companies, added to the chorus of those saying Dodd’s absence would be felt in the leadership of the Senate. “We’re going to miss Sen. Dodd,” he said. “He’s a very experienced elected official who understands the complicated financial services as well as anybody in Washington — and particularly understands the insurance industry.” Grande said that Dodd seemed to share the view that local regulatory structures work best for the insurance sector.
Having come from a state with a major insurance presence, Dodd was widely considered to be sympathetic to the industry. As recently as early 2007, he spoke in support of tweaking certain regulations to ease the atmosphere for business. “Sarbanes-Oxley was never intended to handcuff companies that want to innovate,” Dodd had said. “The stakes are simply too high” in a global context to stifle innovation, he said (BestWire, March 14, 2007). Later that year, he had moved the Natural Catastrophe Risk Management and Insurance Act through the banking committee, which would have created a 16-member expert panel to craft a plan ensuring the availability of insurance for catastrophic natural disasters, but the bill didn’t make it to a vote in the overall Senate (BestWire, Aug. 1, 2007).
“Sen. Dodd led the charge to reauthorize the terrorism risk insurance program, which has ensured a continued, vibrant federal program that has maintained market stability for insurers and U.S. businesses,” said Leigh Ann Pusey, president of the American Insurance Association, in a statement. “He was instrumental in the passage of Gramm-Leach-Bliley Act and most recently, has undertaken a comprehensive look at financial services regulatory reform. Senator Dodd will always remain in high regard by the property/casualty insurance sector.”
Until last year, the senator had been considered a moderate voice on financial issues. In 2009, he increasingly began to champion consumer issues, which political analysts attributed to his need to win back the trust of his constituents by going after the big businesses he was accused of favoring. Travis Plunkett, legislative director for the Consumer Federation of America, called him “the Senate’s leading and most effective champion for protecting consumers from abusive financial practices.”
Meanwhile, Grande said his organization will still be working with Dodd through the end of 2010, most specifically on financial reform. Grande thinks Dodd may approach the work differently now. “Sen. Dodd, freeing himself from the burden and stress of having to deal with a difficult re-election, truly allows himself to work unencumbered on a historic piece of legislation that he wants to get right — not just for his own legacy, but for the sake of the country. While we’re going to miss him, we’re going to have him here working around the clock on getting this right.”
In 2011, the Senate’s banking committee will have a new chairman who will potentially hold significant authority over insurance issues.
(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)
January 7, 2010