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With health care and financial reform on the agenda, 2009 was a record year for insurance lobbying, hitting the mark of $164.3 million in spending for the industry, according to the Center for Responsive Politics.
Every industry’s reach into Washington features two arms: lobbying and strategic campaign contributions. So far this year, the insurance industry is ranked third in lobbying and sixth in congressional campaign contributions, having donated about $21.1 million in the current two-year election cycle.
In August 2009, Democrats had a 10% lead over Republicans as recipients of insurance-industry contributions. Now, that lead has narrowed considerably, with Republicans nearly catching up to the party currently in power. Of the $21.1 million that’s been given by insurance donors in this election cycle, the GOP is now within $152,986 of Democrats.
About two thirds of insurance-related contributions come from political-actions committees. New York Life Insurance’s PAC delivered the most cash, and — along with individual employees — gave $1.4 million. Much of the top dozen is represented by industry trade associations, including the Blue Cross Blue Shield Association, Independent Insurance Agents and Brokers of America, the National Association of Insurance and Financial Advisors, the Council of Insurance Agents and Brokers and the National Association of Health Underwriters.
The industry’s leading recipient for campaign cash in this round has been Rob Portman, a former Republican congressman and former director of the Bush administration’s Office of Management and Budget, given $358,832 in his run for a vacant Senate seat in Ohio. Now that Sen. Chris Dodd, chairman of the Banking, Housing and Urban Affairs Committee, has announced his retirement, Sen. Charles Schumer, D-N.Y., is the leading incumbent recipient, taking in $285,900.
Still, lobbying is the chief influence expenditure, with the industry represented by more than 1,000 lobbyists last year.
Among the top U.S. lobbying organizations is Blue Cross Blue Shield — the association and affiliated companies — currently sitting at No. 8 on the list of groups spending the most to make their points, having been sixth on the list in 2009 during the health reform debate. In 2010, it has so far spent $3.1 million. “Obviously, health care reform was and remains a huge issue — not just for the Blue Cross and Blue Shield companies, but for every American,” said spokesman Brett Lieberman. He said the organization’s lobbyists are still working with Congress “to help educate them and to help implement health care reform so it works and makes sense for everyone.”
The Property Casualty Insurers Association of America is 21st on the list, having spent $750,000. Ben McKay, PCI’s senior vice president of federal government relations, said insurance lobbyists have been extremely busy in this session. His group chalks up some central victories, such as keeping insurers out of the proposed consumer protection agency, largely exempting the industry from systemic risk regulation and fees and removing property/casualty insurers from legislative efforts to strip away antitrust exemptions.
Lobbying the financial reform issue meant doing everything possible to “define the debate” many months ago, McKay said, especially focusing lawmakers in on the idea of what makes risk. “We’re leveraged at 3 to 1 and banks are leveraged at 25 to 1,” McKay said of the insurance industry. “These are just realities, and we happen to be a more conservative industry.” That and the state-by-state system of guarantee funds have helped make the argument that insurers shouldn’t be regulated the same as other major financial institutions, he said.
Sometimes, lobbying isn’t just done by professionals. Agent associations often flood Capitol Hill offices with members. And on May 12, PCI had a legislative day with members. “The legislators always tell us that the most effective thing we do is bring our member companies in,” McKay said. A chief executive officer’s presence lends instant credibility, he said, “that has a greater impact.”
Besides direct campaign contributions and lobbying, though, the recent U.S. Supreme Court decision in Citizens United v. Federal Election Commission opened up a new avenue for corporations getting involved in campaigns. Companies may now engage in unfettered spending on campaign ads. Though the independent expenditures have to be reported in election filings, there are no caps on the amount companies can devote.
“With the decision in January, we’ve entered an unprecedented time,” said Michael Beckel, a spokesman for the Center for Responsive Politics. “We’re still waiting to see exactly how the landscape will shift.” So far, there have only been “a few isolated examples” of the spending, but campaign advertising is months away from its peak. “Corporations and other groups have free rein to come in with 11th-hour political advertisements,” Beckel said.
The American Council of Life Insurers, for one, said it’s unaware of any member activity along these lines, yet.
(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)