Magazine article Risk Management

Legislative Forecasts

Magazine article Risk Management

Legislative Forecasts

Article excerpt

United States

Joanne Waldman

Attempting to forecast the coming legislative session during a normal year is difficult at best. Add to that the final months of 2001, which were anything but normal, and the task becomes close to impossible. Legislation that was arduously nurtured through committees and negotiated with the Bush administration--and issues that finally had made their way to the front burner after years of discussion--were shoved to the furthest corners of Congressional consciousness after September 11. Anything not related to recovery from the terrorist attacks, prevention of future attacks or reining in the sharp decline of the economy was relegated to the year-end stack of unfinished business. Needless to say, terrorism response legislation will likely dominate the beginning of the second session of the 107th Congress as well.

Post-September 11 Insurance

When this article went to print at the end of December 2001, terrorism reinsurance legislation had not been completed. The proposals discussed in Congress revolved around providing a temporary federal reinsurance backstop for the insurance industry while the markets recovered from the losses of September 11.

These legislative provisions included federal loans to the insurance industry, government assistance, industry pools and other reinsurance mechanisms. The largely foreign-based reinsurance market refused to renew terrorism coverage in 2002 (70 percent of reinsurance contracts were up for renewal December 31, 2001) because of the difficulty in pricing and predicting terrorist acts.

The reinsurance issue will gain increased attention when terrorism coverage lines are not renewed at the start of 2002, making America's economic dependence on insurance readily apparent. Real estate, manufacturing and construction--just to name a few of the affected industries--could suffer severe losses if their remaining insurance coverage is inadequate such that banks cannot grant them loans.

Some issues contained in the bills before the House and Senate, including tort reform and catastrophe reserving provisions, are friendly to the risk management and business community, but their controversial nature could delay Congressional action. If and when legislation providing a federal reinsurance backstop does become law, Congress--in its first foray into the state-regulated insurance industry--may need to revisit certain provisions, provide more comprehensive directives or participate in oversight functions.

Patients' Bill of Rights

A patients' bill of rights was one of Senate Majority Leader Tom Daschle's (D-SD) top priorities, and the first piece of legislation introduced on the Senate floor at the start of his leadership in June 2001.

After years of debate and various versions that gained partial momentum before being stalled in conference committee, the bill's supporters promised that 2001 would be the year it was finally signed into law. Prior to September 11, the House and Senate conference negotiators were spending a great deal of time wrangling over the differences between the two versions of a bill that emerged last summer. (Specifically, there was much debate regarding tort provisions such as HMO and employer liability.) Congress and the Bush administration's new focus on terrorism, however, have forced proponents of the legislation to wait until this year.

The American health care system may also receive new scrutiny this year, as officials prepare for future bioterrorist attacks on a scale much larger and more deadly than the anthrax cases discovered in fall 2001.

OSHA Regulations

As for regulatory issues, the Occupational Safety and Health Administration's (OSHA) much anticipated decision on ergonomics, following three national forums last summer, was postponed due to the September 11 attacks. The Department of Labor said it would announce a course of action, be it regulations, best practices or another agency action, at some point in the fall of 2001. …

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