September 28, 1999
New York, NY

Lobbyist: Republican Leaders Will Shepherd Through H.R. 10
Joel Wood, Senior Vice President, Council of Insurance Agents and Brokers

Financial-services reform legislation stands a 60% chance of passage during the current congressional session, a lobbyist for a leading insurance industry association predicted Tuesday.

Joel Wood, senior vice president for government affairs at the Council of Insurance Agents and Brokers, told the Life Insurance Conference of the CIBC World Markets conference that he was betting on the resolve of the Republican leadership to shepherd the legislation through, despite objections to certain provisions by Sen. Phil Gramm, R-Texas, chairman of the Senate Finance Committee, and the Clinton administration.

Congressional conferees are meeting this week in Washington to iron out differences between H.R. 10, the House version of the bill, and S900, the Senate version of the reform legislation.

"The House Republicans are not going to want to lose an opportunity on this bill when it's come this far down the path," Wood said.

The contentious issues of the legislation include which agency--the Federal Reserve or the Treasury Department--would be designated as the umbrella regulator of bank operating subsidiaries; the proposed expansion of the Community Reinvestment Act, which most of the banking community accepts but Gramm opposes; and the privacy issue. "Actually, the privacy issue has overwhelmed H.R. 10 debate over the last six months," Wood said. "The public doesn't care about the regulatory or CRA issues. They care about privacy and confidentiality of medical and financial records."

Wood's organization represents large commercial property/casualty insurance brokers. Its membership in 1975 was 90,000. With the forces of convergence in financial services and consolidation throughout the insurance industry, that number has declined to 40,000.

"Irrespective of what happens legislatively with H.R. 10, banks are going to eat away the remaining share of the independent agency force," Wood said. "You've got companies like Aegon and American General that are very aggressive on the banking side.

For years, Wood noted, the council had worked vigorously to block any encroachment by banks into insurance sales. But convergence in financial services has become so pervasive these days that, he added wryly, "we find ourselves in the position of actively recruiting those banks kept out of the business for a long period of time."