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July 6, 2010 Tuesday 04:51 PM EST
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PCI President: Financial Reform an Industry Win That Could Come Back to Bite
Jesse A Hamilton
WASHINGTON
As the U.S. Senate prepares to return from recess next week and get back to its final vote on financial reform, David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America, breathes a sigh of relief that few in the industry thought possible at the start of 2009. He said his advice back then to company CEOs was to prepare for “unprecedented challenges for the industry.”“I think the property/casualty industry came through in pretty darn good shape,” Sampson said of the “bank-centric” bill that had initially swept insurance into the same regulatory pool. “I would say that’s not by accident. It took a lot of effort.” After months of lobbying, he said, “we were not at the center of the bull’s-eye on financial reg reform.” However, Sampson said the reform bill is, in a larger sense, bad news for the U.S. financial sector, which will surely ripple into insurance circles. “It’s hard to be really enthusiastic about this bill, overall,” he said. His “broader concerns about the impact” include the likelihood — in his view — that the reforms will hurt the pace of the U.S. recovery, will undermine some of the nation’s global competitiveness in the financial world, will accelerate companies’ moves offshore and will increase the cost of credit. Even if the bill passes and is no longer a legislative lobbying priority for PCI, he said the “rule-making phase of this” will occupy much of the organization’s attention in the next year. A particular area to watch will be the formation of a Federal Insurance Office. If it goes through as-is, it represents an achievement of PCI’s mission, Sampson said. He said the industry recognized that a federal office with insurance expertise can be a good thing, and it will help to have a single voice on international issues, but his group wanted to make sure it didn’t represent “duplicative” regulation and that before it could demand market information from insurers, it first had to make sure it wasn’t available elsewhere. “There’s no such thing as cheap information,” he said, referring to the concern that the companies would be bogged down with the expense of federal information demands. Sampson was also glad to see insurers exempted from the reach of another potential new agency — the consumer protection bureau. “That was a top concern for our members,” he said. “That’s a huge win.”The Senate will return next week from the Independence Day recess. Its priority will be dealing with the financial reform bill, though it’s not absolutely clear that the bill’s Democratic proponents have collected the votes they need to avoid a possible Republican filibuster. Because the House of Representatives already passed the bill, the Senate’s vote is all that is needed before the legislation can be sent to President Barack Obama for enactment. In its wake, Sampson still sees a larger societal problem that the financial sector has to deal with. “The spirit of the times we’re in now … is skeptical of the efficiency and effectiveness of private markets,” he said.To listen to the interview with Sampson, go to http://www.ambest.com/media/media.asp?RC=175549 (Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)
July 7, 2010
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