1 / 21

Playing The Hand We Were Dealt

Playing The Hand We Were Dealt. Federal Overview Political Landscape Specific Threats to the Insurance Industry. The World According to the White House & Congress. Obama Needs A Win Health Care/Insurance Reform--$Trillion + ? Financial Services Regulatory Reform

ogeiger
Download Presentation

Playing The Hand We Were Dealt

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Playing The Hand We Were Dealt Federal Overview • Political Landscape • Specific Threats to the Insurance Industry

  2. The World According to the White House & Congress Obama Needs A Win • Health Care/Insurance Reform--$Trillion + ? • Financial Services Regulatory Reform On Tap for the Coming Year: • Obama Tax Reform

  3. Health Reform Card #1

  4. Card #1 • Government-run plan • No agent role • National Exchange • Taxes on life insurance and annuities • Taxes on employer-provided health plans • Taxes on FSAs, HSAs, HRAs • New Government-run LTC program • Repeal McCarran Ferguson

  5. Accomplishments • Favorable Tax Treatment of Products • Role for the Agent • Commissions NOT set by HHS Secretary • Federal Government-run Option not in Senate Bill • FSA Cap Indexed • Current Antitrust Exemption Remains (Senate) • State Exchanges (Senate)

  6. Challenges Ahead • New Government-Run Health Plan • New Government-Run LTC Program • Exchange Structure • Meaningful Agent Role • Medical Loss Ratio • National High Risk Pool Structure • GI without Coverage Requirement • Paying for Reform

  7. Card #2 Financial Services Regulatory Reform

  8. Card #2 • Federal Insurance Information Office • Additional Regulations by a Consumer Financial Protection Agency • All insurance subject to CFPA jurisdiction • Fiduciary Duty for Sale of Securities Products • impractical standards • liability concerns • commissions at risk (House bill) • additional licensure and oversight requirements (Senate bill)

  9. Accomplishments • Insurance information office passed by House and included in Senate bill • NAIFA invited to White House and Treasury meetings to provide input on office • Congressional testimony on CFPA • Most Insurance was excluded from scope of House bill • Major improvements to definition of fiduciary standard in House bill • NAIFA Massachusetts grassroots success (Capuano amendment) • NAIFA Minnesota grassroots success (Ellison amendment) • NAIFA New York grassroots success (Maffei amendment) • Ongoing meetings and relationship building with senior SEC staff • Constructive dialogue with SEC working group on fiduciary duty • Ongoing meetings and relationship building with FINRA • FINRA CEO Richard Ketchum will meet with NAIFA board in March NAIFA • Multiple coalition meetings with industry partners

  10. Challenges Ahead • Preventing new duplicative layers of regulation from being imposed on NAIFA members in the context of the selling insurance, selling securities, or servicing retirement plans. • Subjecting all registered representatives to Investment Advisers Act in addition to the Securities Exchange Act • New licensure requirements • New oversight requirements • CFPA threats in House and Senate bills • SRO for “financial planning” • Preventing extending an impractical and liability ridden fiduciary duty to the sale of securities products

  11. Card #3 Federal Tax Challenges

  12. Card #3 • The U. S. Economy in Freefall • Massive Federal “Bailout” and Economic Stimulus Program Charged to Nation’s AMX Card • Campaign Promises to Keep -Universal Health care/Insurance - “Pay As You Go” -Energy Independence-Green House Gases

  13. Accomplishments • No Life Insurance/Annuity Taxes To Pay For • 2009-10 General Federal Budget • American Recovery and Reinvestment Act • S-CHIP Program • Energy Program (Cap and Trade) • Health Care Reform

  14. Challenges Ahead • Statutory “Pay-Go” - Coupled with Estate Tax Reform? • Deficit Reduction Commission—with Teeth • Obama Tax Reform Advisory Board - “Almanac of options” • Expiring 2001-2003 Bush Era Tax Cuts • 2010 Federal Budget: Deficits! Deficits!

  15. Card #4 State Games

  16. NAIFA Estimates $2 TrillionOver 5 Years in Federal Tax Benefits Favor Insurance • $158.8 billion-Life Insurance and Annuity Cash Values • $568.3 billion-Employer-Provided Health and LTC Insurance • $ 25.1 billion-Self-Employed Health and LTC Insurance • $172.7 billion-Cafeteria Plans* • $ 17.0 billion-Employer-Provided Accident and Disability Insurance • $ 12.4 billion-Group Term Life Insurance • $ 6.5 billion-Health Savings Accounts • $418.7 billion-Capital Gains and Dividends (Investment Products)*  • $460.0 billion-Employer-Provided Pensions* • $ 73.4 billion-Self-Employed Pension Plans* • $ 40.7 billion-IRAs* * insurance industry shares tax incentives with banking, mutual fund and securities industries. Source: Congressional Joint Committee on Taxation - Projection 2009-2013.

  17. Ten Ways to “Tax” InsideBuild-Up Without Taxingthe Inside Build-Up • Limit Cash Value Build-Up Based on Income of Policy/Annuity Owner • Cap on Death Benefits • Tax Life Insurance Policy Distributions Under (Annuity Like) LIFO Rules • Treat Life Insurance Loans (not taxed currently) as Withdrawals on LIFO Basis • Insurance Company Level Taxes That Diminish Policy Owner Values – e.g. Dividends Received Deduction (Obama proposed May 11, 2009)

  18. Ten Ways to “Tax” InsideBuild-Up Without Taxingthe Inside Build-Up • Tax Policyholder Dividends/Interest Beyond Guaranteed Amounts • Make Changing Investment Funds Inside Variable Products a Taxable Event • Scale Back Business Owned Life Insurance “Best Practices”- for example, Cut Business Loan Interest Deduction for Businesses Owning “Key Person” Life Insurance. (Obama proposed May 11, 2009) • Restrict Use of Non-Qualified Deferred Compensation • Provide Equal Tax Incentives for All SavingsWhether Short or Long Term

  19. Do You Feel Lucky?

  20. Questions? • Most questions about PIC and PAC matters can be answered at http://www.naifa.org/advocacy/ifapac/ and http://www.naifa.org/advocacy/apic/ • Most questions about state and federal legislative issues can be answered at http://www.naifa.org/advocacy/ • Or, call NAIFA Government Relations at 703-770-8188

More Related