I hope this article finds you all to be well and recovering from the Holiday festivities. In spite of the economic downturn and rising unemployment that dominated 2009, the Holidays were a time for enjoying the company of loved ones, as well as reflecting on the year that was, as well as what is in store for 2010.

Here is my two cents worth when it comes to predictions and projections in 2010.

1. Producer Compensation Disclosure (a/k/a Regulation 194) will be here. The Insurance Department, with the “guidance” of the trade associations, will finally put out Regulation 194, with language and requirements that the agent and broker community can live with.

2. Health Care Reform: President Obama will finally sign a health care reform bill that will not include a public option. The good news for agents and brokers is that there is no public option, meaning the Federal Government will not be competing with the private sector. The Bad news is that there will be tremendous confusion and more taxes associated with the bill.

3. The Soft Market Remains: Although the economy is rebounding, it’s moving along at a very slow pace. Increasing rates would be counter-productive. Reinsurers have held the line on their rates; some have actually reduced them. No catastrophes to speak of in 2009. So it’s a good bed the soft market is here to stay for another 12 months.

4. The Democrats will lose more seats in the house. The political climate has not been friendly to President Obama and his fellow Democrats. A troubled economy, the war in Afghanistan, the Health Care issue and the reaction to Obama’s soft stance on suspected terrorists, coupled with his initial reaction to the aborted terrorist attempt in the plane that was en route to Detroit has many people wondering if he is in over his head. Many long-term incumbent Democrats are shaking in their boots, while Republicans are chomping at the bit, looking to grab seats in both the House and the Senate.

5. Federal Regulation of the Insurance Industry: In the wake of the late 2008-mid 2009 collapse of the financial markets, the House and Senate will focus their efforts on federal oversight of the financial markets to better manage systemic risk, while placing the Optional Federal Charter on the back burner. With the exception of standardization of policy forms and licensing, putting the OFC on the back burner is good news for the agent and broker community.

Got an interesting story or comment? Send it to me at rickl@petrocelligroup.com.

Richard Longueira, AAI
Tri-Lines Editor