Elections and Transitions: Regulation, Resolution, and the Road Ahead - IAIR Issues Forum February 11, 2021 Pat Hughes Josh Andrews
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Elections and Transitions: Regulation, Resolution, and the Road Ahead IAIR Issues Forum February 11, 2021 Pat Hughes Josh Andrews Faegre Drinker Biddle & Reath LLP
Pat Hughes
Role: Leads Government Relations & Regulatory Strategy team for
Faegre Drinker’s insurance practice; former regulator focused on
national state strategies and federal executive branch policymaking
Now: Putters around the house in his bathrobe, waiting for regulatory
conferences to come back
COVID Habit to Keep: No alarm clocks
**photo taken pre-lockdown
Josh Andrews
Role: Congressional strategy and lobbying with a focus on the
insurance industry; former Hill staff on both House and Senate side
Now: Gently explaining to his feral pets in rural Virginia that someday
he’ll have to go back to the Hill
COVID Habit to Keep: Only essential commuting
**photo taken pre-lockdown
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What we’ll cover … Election Overview Potential Resolution Impacts • Presidential results • Past resolution impacts • Congressional results • Congressional committees • State governors • Executive Branch • State commissioners • What’s the watch list? Federal and State priorities A peak at 2022 • Biden-Harris administration • Senate • Congress • Governors • States • Commissioners • NAIC Closing Thoughts 3
Election Outcomes 4
Presidential Results
5
Source: New York Times
House Election Results
Democrats 222 (-10) Republicans 212 (+11)
6
Source: New York Times
Senate Election Results
Democrats 50*(+3) Republicans 50 (-3)
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Source: New York Times
Congressional Implications for the Insurance Industry
House Financial Services Committee
• Rep. Cleaver to Chair of Subcommittee on Housing, Community Development and Insurance
• Reps. Torres (D-NY), Auchincloss (D-MA), Williams (D-GA) added
Senate Banking Committee
Leadership
• Sen. Brown (D-OH) takes over as Chair
• Sen. Toomey (R-PA) replaces Sen. Crapo (R-ID) as top Republican
Membership turnover
• Sens. Jones (D-AL), Perdue (R-GA) and Martha McSally (R-AZ) defeated;
• Sen. Schatz (D-HI) left the Committee
• Sens. Ossoff (D-GA), Warnock (D-GA), Lummis (R-WY) and Haggerty (R-TN)
Legislative Outlook
• COVID, housing, social equity issues
• Economy = Stimulus + Infrastructure?
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Insurance Commissioner Election Outcomes
• All incumbent commissioners came out on top:
• Mike Causey (R-NC)
• Trinidad Navarro (D-DE)
• Mike Kreidler (D-WA)
• Jon Godfread (R-ND) (unopposed)
• In Montana, Troy Downing (R) defeated Shane Morigeau in the race
for the open Commissioner’s seat.
• Downing assigned to Property Casualty (C) and Market Regulation (D)
Committees for 2021
9
Gubernatorial Election Outcomes
• “Safe” incumbents won: • In Montana, Republican Greg Gianforte
• Doug Burgum (R-ND) defeated Lt. Gov. Mike Cooney to capture
• John Carney (D-DE) the state’s open seat.
• Eric Holcomb (R-IN)
• Jay Inslee (D-WA) • In Utah, Lt. Gov. Spencer Cox (R) defeated
• Jim Justice (R-WV) Chris Peterson.
• Phil Scott (R-VT) • Governor Cox has now filled Utah’s
commissioner post.
• Races marked “Competitive” also went to
incumbents:
• Roy Cooper (D-NC)
• Mike Parsons (R-MO)
• Chris Sununu (R-NH)
10Establishing a Lineage of Leadership Jonathan Pike, Utah Insurance Commissioner Christopher Pike, Captain, USS Enterprise Command Assumed: 2021 Command Assumed: 2250 11
NAIC Officers in 2021 (and beyond): Leadership During Interesting Times
PRESIDENT: Commissioner David VICE PRESIDENT: Director Chlora
Altmaier (FL) Lindley-Myers (MO)
• A steady, influential voice and • A longstanding and respected
spokesperson for state system regulator
nationally and internationally • Governor won re-election in 2020
• Governor is in 2022 cycle • NAIC President in 2023
PRESIDENT-ELECT: Director Dean SECRETARY-TREASURER:
Cameron (ID) Commissioner Andy Mais (CT)
• A former agent who has been an • Broad industry and regulatory
effective voice on suitability and best experience
interest in particular • Governor is in 2022 cycle
• Governor is in 2022 cycle • NAIC President 2024
• NAIC President in 2022
122021 NAIC Committee Leadership • Life Insurance and Annuities (A) Committee • Financial Condition (E) Committee Chair: Marlene Caride, New Jersey Chair: Scott A. White, Virginia Vice Chair: Glen Mulready, Oklahoma Vice Chair: Michael Conway, Colorado • Health Insurance and Managed Care (B) • Financial Regulation Standards and Committee Accreditation (F) Committee Chair: Jon Godfread, North Dakota Chair: Elizabeth Kelleher Dwyer, Rhode Island Vice Chair: Jessica K. Altman, Pennsylvania Vice Chair: Lori K. Wing-Heier, Alaska • Property and Casualty Insurance (C) • International Insurance Relations (G) Committee Committee Chair: Vicki Schmidt, Kansas Chair: Gary Anderson, Massachusetts Vice Chair: Mike Chaney, Mississippi Vice Chair: Bruce R. Ramge, Nebraska • Market Regulation and Consumer Affairs (D) Committee Chair: Barbara D. Richardson, Nevada Vice Chair: Sharon P. Clark, Kentucky 13
Federal and State Priorities 14
Priorities & Opportunities BIDEN LEGISLATIVE VEHICLES - COVID recovery / vaccination - COVID-19 relief package - Economic recovery - Infrastructure / Highway bill - Climate change - ?? - Social justice - Corporate tax reform 15
Select Priorities at the State Level
• STATE: • NAIC
• Vaccine • Long-term care
• Managing re-opening • Climate
• Budget • Group capital and supervision
• Race & Insurance
• Innovation/Data/AI
• Resolution-Focused at the NAIC
• Accreditation analysis
• Continuity of essential services
• Additional macro-prudential
analysis
• International resolution work
16Insurance Resolution 17
A Resolution-focused View of Political Developments 18
How has federal policy impacted insurance resolution in the past?
Post-crisis attention
SIFI Designations
Dodd-Frank Title II
Resolution Plans
International standard setting
Federal Policymaker observations
19Where could we see relevant activity? 20
Watchlist in 2021 • Do we get a “new Dodd-Frank”? (and what does that look like?) • What rocks does the “activities-based approach” to systemic regulation allow the administration to look under? • Biden’s priorities are big – is there room for financial services reform? • Legislative pressure on executive branch action • Administration officials focused on insurance • Will be interested in backgrounds, perspectives, and priorities • Events and developments driving regulatory policy • A new state-federal dynamic? 21
A Peak Ahead at 2022 22
2022 Senate and House Mid-terms House - 221 - 210 - Democrats Cedric Richmond, Deb Haaland, and Marcia Fudge joining Biden Administration - 2 Congressmen died (COVID) - Pelosi will not run for Speaker next Congress Senate - 34 races – 20 Republican / 14 Democrat - Retiring incumbents - Burr (R-NC), Portman (R-OH), Toomey (R-PA), Shelby (R-AL) - No Democratic senators are running for reelection in states won by Trump - Republicans defending two seats in states won by Biden (PA/WI) 23
Looking Ahead: 2021-2022 State Elections
• Who’s up in 2021?
• Governors: Virginia and New Jersey
○ VA’s Ralph Northam is term-limited and cannot seek
re-election
○ NJ’s Phil Murphy is eligible to run again
• No insurance commissioner elections
• What about 2022?
• A big year for state elections (with plenty of
insurance implications)
• Open seats and swing-state 2018 flips
• 36 gubernatorial seats up for re-election
• Insurance commissioner elections: CA,
GA, KS, and OK
○ All incumbents eligible to run
24Closing Thoughts 25
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The Rising Sun Chair 29
THANK YOU FOR LISTENING, AND BEST TO IAIR FOR A GREAT 2021! Pat Hughes +1 202 312 7421 pat.hughes@faegredrinker.com Josh Andrews +1 202 589 2819 joshua.andrews@faegredrinker.com 30
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