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Insurance Industry News from ProgramBusiness.com2005 Legislative Agenda
With the start of a new Congress and state legislative sessions, the Independent Insurance Agents and Brokers of America (the Big "I") announced its legislative agenda for 2005.
Top issues for the insurance association this year will reportedly include the following items:
Broker Fee Disclosure—The Association will work closely with state legislatures and Congress in any review of broker compensation, and the Big "I" will continue its call for broker disclosure of meaningful information concerning incentive fee arrangements, while continuing to support legitimate incentive compensation arrangements, which are commonly used to reward outstanding sales performance.
Insurance Regulatory Reform—The Big "I" will continue to strongly support the State Modernization and Regulatory Transparency (SMART) Act discussion draft, the result of the joint efforts of House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Subcommittee Chairman Richard Baker (R-La.). Independent agents and brokers hope to see the discussion draft, which would reform the current state-based regulatory system without creating a federal regulator or "optional" federal charter, introduced this year.
Terrorism Insurance Backstop Renewal—The Association will continue to work with its industry partners for the renewal of the Terrorism Risk Insurance Act (TRIA), providing a federal backstop to help cover uninsurable catastrophic losses in the event of a major terrorist attack on American soil.
Tax Reform—The Big "I" continues to support changes in the tax code to allow a quicker depreciation schedule for intangible assets, such as customer lists and the write-off of the first $5 million of intangible assets acquired in the purchase of another agency, with ratable depreciation over 14 years. It also supports President Bush's call to make the individual tax rate reductions permanent, which would benefit independent agencies ("S" corporations) that pay taxes at personal rates, as well as the elimination of estate taxes. The Big "I" also opposes an increase in Social Security payroll taxes or the elimination of the wage cap, which would prove very onerous for small business owners.
Legal Reform—Independent agents and brokers will continue their push for much needed reforms to the current litigation system for claims related to asbestos exposure, medical malpractice cases and class-action lawsuits.
Crop Insurance Reform—The Big "I" will work to build upon its successes in late 2004, in which the Federal Crop Insurance Corp (FCIC) properly decided to stop the proliferation of Premium Reduction Plans (PRPs) pending further review. The Association has been the leading voice in favor of agents who sell this type of insurance, and has made the case against proliferation of plans that would hurt farmers by undermining the ability of independent agents, who have great expertise in this field, to serve America's farmers
Health Care Reform—Independent agents and brokers will continue to seek increased access to health insurance to help the uninsured obtain the coverage they need. The Big "I" believes this can be accomplished by Congress working with the Bush administration to expand health savings accounts (HSAs) and create refundable tax credits.
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