Wheaton, Ill., April 19, 2011--While there are few direct threats to the property/casualty industry in the current U.S. Congress, P/C insurers are advised to remain vigilant regarding several issues that could have a spillover effect on them.

Thomas Litjen, vice president of federal government relations for the Property Casualty Insurers Association of America (PCI), told attendees at the recently concluded AAIS Main Event conference that, despite Congress's focus on the nation's budget crisis, P/C trade associations are monitoring several federal issues that could impact their members.

According to Litjen, these issues include, among others:

• The appointment of an insurance industry representative to the newly-created federal Financial Stability Oversight Council;

• A new proposal to repeal, for health insurers, the limited antitrust exemptions provided by the 1945 McCarran-Ferguson Act;

• A long-term extension of the National Flood Insurance Program;

• The impact on P/C insurers of federal health policy, including but not limited to the 2010 health care financing law; and

• The increasingly remote prospects for a federal financial backstop for state natural disaster funds.

Regarding the latest attempt to repeal the McCarran-Ferguson exemptions for health insurers, Litjen noted that health carriers were less dependent on the exemptions than the P/C industry, and perhaps less concerned for its preservation.

P/C trade associations are on alert, however, should there be any attempt to extend a repeal of McCarran-Ferguson to medical malpractice insurance, a P/C line of business.

"In such a small specialty line, the repeal of McCarran-Ferguson would hurt competition," Litjen said. "It would hurt new entrants into the line."

Regarding federal health policy generally, Litjen said, "We can expect major, if not tectonic, changes in cost-shifting in this area. I predict some real adverse impacts on our industry."

The Main Event is a conference devoted to product-related issues of strategic concern to property/casualty insurers. It is sponsored by the American Association of Insurance Services (AAIS), a national advisory organization that develops policy forms and rating information used by more than 700 P/C insurers throughout the U.S.