Producer Disclosure Issue, 2005 Preparation, NQDC Comments Keep AALU Busy

 

While many AALU members, myself included, are in the midst of our end-of-the-year push, AALU is busy preparing for next year’s legislative agenda. We are also nearing the final stages of key 2004 efforts and have taken on yet another major initiative. Some people have said "AALU keeps our volunteers so busy, if they get legislated out of business, they won’t miss it."  While this comment is a joke to be sure, I can’t help but reflect on the quantity and magnitude of threats that our business currently faces.

Producer Disclosure Issue

As you know, the allegations against the two largest P & C brokers has generated quite a bit of activity in the media, among state regulators around the country and this week in Congress. To formulate our position and help develop an industry response, I have established a special task force led by Immediate Past President Bob Plybon. We have been in constant communication with industry partners in the Issues Alliance, NAIFA, ACLI, and we have reached out to other interested parties such as NAILBA, seeking to speak with a unified voice. Earlier this week, outgoing Senate Government Affairs Subcommittee Chair, Sen. Peter Fitzgerald, held a hearing to discuss the allegations first raised by the New York State Attorney General. While the hearing focused significantly on potential antitrust issues with the P & C industry, issues concerning producer commission disclosure and the legal relationship between agents/brokers and clients were discussed. As we have reported in Washington Reports over the last week, California’s Insurance Commissioner has proposed very onerous changes, that if adopted, would dramatically change the legal relationship between most AALU members and their clients. The National Association of Insurance Commissioners has put forth a model law to achieve some degree of uniformity among the 50 states and the District of Columbia. NAIC’s model law, however, which would have to be adopted individually by the states, would also impose significant changes to the way we do business.

This issue has been "live" for a little more than a month, and it has already gained significant momentum. We will continue to play an active role in educating legislators and regulators on the practical implications of the choices they make.

2005 Legislative Agenda

Incoming President Roger Sutton and I will be meeting with staff and counsel the Monday after Thanksgiving to map our strategic approach to the issues we face over the next year. Here’s a brief synopsis of our agenda:

  • Discuss the sequencing and priorities of Congressional Republicans and the Administration for tax legislation next year
  • Consider strategic options in light of the fact that estate tax repeal supporters have more than enough support to expand the window of repeal beyond 2010 if they utilize the budget reconciliation protection
  • Hold initial discussion on tax reform: A Tax Reform Commission is set to named by the President before the end of the year, ideas that have already been floated inside the beltway include reviving the Lifetime Savings Proposals, eliminating the individual AMT, repealing the state and local tax credit, repealing the employer sponsored health insurance deduction, lowering the income tax rates, and preserving the mortgage and charitable deductions. The President has also said he wants the proposal to be revenue neutral and the inside buildup could be significantly in play.
  • We will look to codify the Conrad Amendment at the earliest opportunity
  • We must finalize and submit comments to the Treasury on the forthcoming NQDC regulation

We are also preparing an ambitious program for the Annual Meeting, because one thing’s for sure: We’ll have plenty to talk about.  We’ll need everyone to get involved over the next year if we are to succeed. If you are looking to get involved, here are a few suggestions:

  • Respond to this email and let me know your thoughts
  • Make your Legislative Circle Program contributions today (Information: saltelli@aalu.org )
  • Register to attend the Annual Meeting (Information: schneider@aalu.org )
  • Get involved in our Membership Campaign (Information: maticic@aalu.org )
  • Sign up for IMPACT to learn how to get more politically involved (Information: brown@aalu.org )

While I can’t remember a time in my lifetime where our industry faced so many diverse and serious threats, I am filled with confidence that we will persevere and that we will turn challenges into opportunities. I have this confidence because I have been fortunate to get to know so many of you. As the industry’s finest, you continue to demonstrate your incomparable talent, fortitude and commitment.

I hope that you and yours have the happiest of Thanksgivings and I look forward to writing you once again after I get back from Washington.  Thank you for your continued support.

Gus

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Gus H. Comiskey, Jr, CLU
Association for Advanced Life Underwriting
President
2901 Telestar Court, 4th Floor
Falls Church, VA 22042
Phone: 703-641-9400
Fax: 703-641-9885
Toll Free: 888-275-0092