The theme of "change" was prominent in Barack Obama's campaign, and as the president-elect announces his cabinet appointments, speculation about the nature of that change continues. Given that a Democratic president is succeeding a two-term Republican and that, moreover, the Democratic Party has increased its dominance in Congress, the insurance industry might be expecting significant changes to ensue from the Nov. 4 election.The industry is indeed anticipating change but more as a result of the financial crisis than the election, despite the significant changes in the character of the government. I refer readers to today's featured article in I&T Daily for broader coverage, but share here some details of a conversation with NAMIC's (National Association of Mutual Insurance Companies) vice president of federal and political affairs Jimi Grande, whose point of view is more or less in line with that of other industry association representatives.

"Clearly we have a host of other issues, such as extending and reforming the NFIP [National Flood Insurance Program], working on building code legislation and a handful of other areas," Grande says. "However, they're all being overshadowed by the state of our fragile economy and how Congress, once they get through the stabilization part, is talking about the greatest overhaul of the financial service industry regulation since the 1930."

The crisis exposed some areas where it is reasonable to impose regulatory oversight, such as in the case of credit default swaps, which influenced the collapse of AIG, Grande notes. However, a warrant for regulatory reform could end up overreaching, he believes. "As the saying goes, Congress does two things well: they do nothing at all or they overreact," Grande quips. "We're concerned about the possibility of an overreaction."

Grande believes, along with other association officers, that some kind of federal oversight of the insurance industry is likely to be promulgated by the new government. His concern, he sais is, "We don't want to see some sort of sweeping federal or dual regime that wipes out the current state-based system, which as far as solvency goes has behaved admirably, compared to its counterparts at the federal level."

State regulators are likely to stay in place, Grande believes, but the federal government may abrogate to itself oversight over some aspect of regulation, for example, solvency or consumer protection provisions. In that case, Grande's concern would be for the effect such changes might have on many NAMIC members, who lack resources to dedicate to novel compliance demands. "Such changes might be manageable for big companies but whatever goes to the federal level will be problematic for small companies," he says.Given that a Democratic president is succeeding a two-term Republican and that, moreover, the Democratic Party has increased its dominance in Congress, the insurance industry might be expecting significant changes to ensue from the Nov. 4 election. However, the industry anticipating change more as a result of the financial crisis than the election.