NAIFA Takes Grassroots Lobbying to a New Level
Over 1,000 NAIFA Members Address Issues With Capitol Hill Lawmakers
Contact
Jim Edwards
Assistant Vice President, Communications
NAIFA
703-770-8112
WASHINGTON, DC —The National Association of Insurance and Financial Advisors, the insurance industry's leading grassroots lobbying organization, took advocacy to a new level yesterday. Upwards of 1,000 NAIFA members from all 50 states, Puerto Rico and the District of Columbia fanned out across Capitol Hill for meetings with their representatives to lobby on legislative issues important to the business interests of all NAIFA members.
"With this program we had a chance to demonstrate our advocacy mission in a big way," said David E. Smithkey, CLU, RFC, NAIFA's president. "This program was an unprecedented show of our strength as a top-notch grassroots organization."
"Every state delegation conducted at least two meetings, and most met key members of both the House and Senate," noted David F. Woods, CLU, ChFC, LUTCF, NAIFA's chief executive officer. "They were effective meetings. Our members went in well-prepared, and with a clear and consistent message."
From all indications, said Mr. Woods, participants came away from the experience excited to be part of the political process. They also came away "with a deeper understanding that the actions of lawmakers in Washington and in state capitals can have a profound effect on their businesses and ability to serve their clients."
Mr. Smithkey also pointed out that participants, especially first-timers, will return home ready to serve as an advocate for the industry at the state level. There, they can join efforts led by NAIFA's state associations to effect change in their state legislatures.
NAIFA members focused their Capitol Hill meetings on the following issues before Congress:
Association Health Plans. NAIFA and the Association of Health Insurance Advisors (AHIA), NAIFA's health conference, are sensitive to the tension between cost and availability in the small group health insurance market. While always in search of private sector initiatives to improve the availability and affordability of health insurance for small businesses, AHIA and NAIFA oppose H.R.525 and S.406 in their present form. These are legislative proposals that would establish federal AHP insurers. They may sound good, but they would put small business coverage in jeopardy.
The Business Use of Life Insurance. Large and small businesses have used life insurance for many years for a variety of business purposes. Life insurance is used to protect against the death of key employees and redeem the stock of deceased stockholders. A life insurance plan frequently referred to as COLI (Corporate Owned Life Insurance) can perform a valuable role in helping employers fund future benefit obligations such as health insurance for retirees. In order to preserve the use of life insurance as a funding tool for critical employee programs, key members of Congress have developed the "COLI Best Practices Act of 2005." NAIFA joins with the Association for Advanced Life Underwriting in supporting passage of the COLI Best Practices Act of 2005 as incorporated in S.219 (NESTEG) and offered in the House by Reps. Tom Reynolds (R-NY) and Earl Pomeroy (D-ND) as H.R.2251. This legislation will make it clear that life insurance used by corporations in a responsible way can help provide valuable employee benefits.
Expanding Investment Advice to Beneficiaries of 401(k) Plans. With the shift away from defined benefit plans and toward defined contribution plans that offer plan participants the ability to choose among investment options within the pension plan, employee access to investment advice is more essential than ever. However, studies show that only 16% of 401(k) participants have an investment advisory service available to them through their employers-creating what has become known as the "advice gap." NAIFA strongly supports the investment advice provisions in the Pension Protection Act, H.R.2830. The bill would allow employers sponsoring 401(k) plans to engage investment advisors-including insurance company providers (and their licensed insurance agents)-to offer recommendations to employees participating in those plans.
Tax Incentives to Buy Long-term Care Insurance. The NAIFA federation advocates for stronger incentives to purchase long-term care insurance. NAIFA recognizes the Bush Administration for its past support of proposals to provide an "above the line" tax deduction for qualified LTCi policies and urges the Administration to get behind similar proposals this year.
Retirement Security for Life. NAIFA believes that as important as it is to build retirement savings, it is just as important to ensure these savings will last a lifetime. NAIFA supports the Retirement Security for Life Act (H.R.819 and S.381) to encourage individuals to invest in lifetime annuities. Annuities empower Americans by allowing them to receive a steady "paycheck" for life to maintain their standard of living through their retirement years. NAIFA also supports bills such as the Lifetime Pension Annuity for You Act, H.R.2951 and S.1359, which provide tax incentives to convert both qualified pension plan assets and non-qualified assets into lifetime monthly annuity payments.
Tax Reform and Long-term Savings. NAIFA calls on Congress and the Administration to embrace tax incentives that recognize the vital role life insurance and annuities play in retirement security. The Administration's savings proposals put forward in the FY 2006 budget include the creation of Lifetime Savings Accounts (LSAs), Retirement Savings Accounts (RSAs), and Employer Retirement Savings Accounts (ERSAs). NAIFA opposes LSAs. The LSA is an individual savings account that allows tax-free interest earnings on up to $5,000 per year of after-tax contributions, along with tax-free distributions from these accounts at any time and for any reason. It is feared that LSAs, because of lack of limits on their use, will create a negative environment for the purchase of permanent life insurance and annuities. Simultaneously, the President's tax reform panel is preparing to make recommendations to the Treasury Department on fundamental tax reform. No matter what tax policy Congress may embrace, NAIFA urges Congress to provide extra incentives for individuals to save for their future financial and retirement security through savings products that are "locked up" for future delivery - like life insurance, annuities and qualified retirement plans.
Also during its convention, NAIFA conducted an aggressive campaign to raise funds for its Political Action Committee, the number-one rated insurance PAC.
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.