The Independent Insurance Agents of America drew a record 800 members to its annual legislative conference last week. Agents logged 1,000 visits to House and Senate offices to lobby on financial reform and other issues.
Yet the agents' group is splintered on financial reform. Some members want tougher federal restrictions on bank sales of insurance; others want to be left alone to cut deals with bankers in their states.
As a result, the IIAA is officially neutral on the bills approved last month by the House and Senate Banking committees, said Robert A. Rusbuldt, the group's executive vice president. He wants more leeway for states to control bank insurance sales but is tolerating a compromise reached last year with bankers to prevent the provisions from getting worse for agents.
Edward L. Yingling, chief lobbyist for the American Bankers Association, said the growing number of deals between state banking and insurance groups has "slowly undermined" the agents' lobbyists in Washington. Compromises in Illinois and New York have been models for the reform legislation, and legislatures in Florida and Texas are considering bills based on industry- led pacts.
"That's not to say they don't have strength," Mr. Yingling said of the IIAA, "but it is not the grass-roots breadth they used to have."
"I don't agree with that at all," Mr. Rusbuldt said, arguing that agents from the "model" states have stronger interests in the reform battle in Congress. "They are actually up here fighting to preserve their deals."
Update on financial reform: House Commerce's financial institutions subcommittee is to hold hearings on the bill April 28 and May 5. Though the Senate is supposed to vote on its version in early May, Majority Leader Trent Lott and Banking Committee Chairman Phil Gramm have still not met with key Democrats to seek a compromise.
The Financial Services Council has added four members: Metropolitan Life Insurance Co., Prudential Insurance Co. of America, American General Corp., and Nationwide Insurance Enterprise.
The council-which now has 20 members, including BankAmerica Corp. and Citigroup Inc.-needed to beef up its ranks after megamergers claimed some members, president Samuel J. Baptista said. Adding insurance companies diversifies the group's membership.
"Everything we do is focused on financial modernization" legislation, which the group strongly endorses, he said. "The insurance companies are becoming more and more interested in the debate.
