Progressive

We mourned the death of former Governor Mario Cuomo as did so many across the State. He was a refreshing liberal personality in that he was always clear in what has been lately called “progressive” orthodoxy in taking positions on the issues that faced New Yorkers. In financial services, he was responsible for the De Wind Commission that liberalized Depression Era wall-offs of banking and insurance, he tackled health care providers and presided over a period of economic change. As a man, he was a good example as a father, husband and Italian American. Politics is the ultimate compromiser. Mario Cuomo stood strong against that force and protected his humanity and his personhood from the potential scandalous perils of office. R.I.P. … No relief is in sight for reinsurers facing rate reductions, low ROI’s and increasing competition from new capital sources. A recent report issued by Willis states that “downward pressure on reinsurance rates has continued across nearly all lines and geographies, with abundant over- supply of capital continuing to outstrip demand following yet another year of benign loss activity.” The further “tiering” of reinsurers puts real pressure on smaller reinsurers who have the additional burden of competing with the capital funds available to larger entities. M&A activity is at an all-time high reality, as further delays augur a decrease in valuations. “With only a limited supply of attractive target companies, consolidators looking for scale and diversification are moving as company valuations become more reasonable for both parties,” the report goes on to state. Watch Insurance Advocate for news of at least two substantial consolidations in this sector just ahead. … Just before the holiday break, Congress passed the Small Business Efficiency Act providing the first ever-federal statutory recognition of Professional Employer Organizations (PEOs). The Act institutes a voluntary certification process for PEOs with the IRS and recognizes the HR outsourcing companies under the federal tax law, creating clarity for PEOs in collecting and submitting taxes on behalf of their clients. Midge Seltzer, Engage PEO president and former National Association of Professional Employer Organizations Chair, started a grassroots program to drive the passage of the legislation. The federal law will allow for PEO certification and will recognize the accrual of tax requirements, providing security for PEO clients. PEOs also now have clear authority under the IRS to collect and remit taxes on behalf of their clients. The new IRS certification program is available to PEOs that meet financial standards and satisfy reporting obligations. A small number of PEOs already qualify for additional client coverage through the Employer Service Assurance Corporation’s (ESAC) financial coverage pro- gram, providing clients of accredited PEOs with protection from bonds of up to $16 million. … Really pleased that a compromise has been negotiated in the matter of inspections – see story this issue – and that some of the worthwhile effects of “Reg 79” will not be dumped, while the efficiency of the process for agents is streamlined. Kudos to the parties.