Sen. Mike Crapo, R-Idaho, will likely replace Sen. Richard Shelby, R-Ala., as ranking minority member of the Senate Banking Committee this year.
The panel is the key Senate oversight panel for the insurance industry.
All committee assignments will be confirmed when the Senate returns to work from its current recess Jan. 22.
Key issues of interest to the industry are capital standards, designation of insurers as systemically significant, regulation of insurers which own thrifts and proposed upgraded standards governing sale of investment products. Those issues are being debated by the Securities and Exchange Commission and the Employment Benefits Administration of the Department of Labor.
The Senate Banking Committee will also be dealing with proposed renewal of the Terrorist Risk Insurance Act, which expires Dec. 31, 2014.
With the need to raise the borrowing limit of the National Flood Insurance Program by one-third to pay claims for Superstorm Sandy, the NFIP will also be on table, especially a proposal by Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, to entertain legislation that will transition the flood program to the private sector.
A spokesman for Crapo said he is most focused on the debt and deficit situation as a member of the original Gang of Six, citing Crapo’s comments on the debt ceiling and entitlement cut debates that Congress will take up in the first few months.
But, the spokesman said, Crapo “would like to work with Chairman Johnson, D-S.D. to find ways to make Dodd-Frank work well for both consumers and the lending industry.”
The spokesman noted that, however, fiscal issues will be Crapo’s main concerns.
“Our nation faces critical deadlines for getting our fiscal house in order,” Crapo said.
“Congress must focus on the real drivers of our debt and deficits by enacting real, enforceable spending cuts, structurally reforming our entitlement programs to prevent impending insolvency, and enacting pro-growth tax reform that will reduce tax rates for American families and businesses, and make the tax code more simple, efficient and competitive.”
A spokesman for Shelby said he is stepping down after serving the term maximum as a ranking member allowed by the Republican Senate Conference.
He is the longest-serving current member of the committee, having joined in 1986. Crapo, 61, has served as a member of the committee since he joined the Senate in 1999.
But, a spokesman for Shelby said he would “remain on the panel as its senior Republican and continue to be involved in committee matters.”
One industry and one congressional staff source said the change had more to do with the decision of Sen. Thad Cochran, R-Miss., ranking Appropriations Committee member, to become the ranking member of the Senate Agriculture Committee.
That left an opening for Shelby to take a position where he could best serve Alabama, the sources said.
“Sen. Crapo is one of the hardest working and thoughtful members of the Senate,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies.
Grande said that Crapo’s vast experience and his commitment to free markets and open competition make him an excellent choice to serve as the ranking member of the Senate Banking Committee.
“I look forward to working with him closely in the coming months as Congress tackles the reauthorization of TRIA as well as myriad other issues that will be facing NAMIC members in 2013, Grande said.”
Ray Lehmann, a fellow at the R Street Institute, a think tank, cautioned that it “will be difficult to replace the depth of knowledge on insurance and financial services issues that Shelby brought to the committee, but Crapo is a veteran member and his staff has always been very interested in ways that market forces can be used to shape a vibrant, competitive private insurance market."
An industry official who asked not to be named added that the change was “no surprise.”
The official said that the financial services industry generally considers both Crapo and Shelby to be “smart, engaged, and critical.”
The official explained, that, “With very few exceptions, it's a committee that operates by consensus, and I'm not sure the seat shuffling is that consequential.
“I say that with the possible exception of the reauthorization of the Terrorism Risk Insurance Act,” he said, adding that, “On balance, Shelby has been more skeptical of the need for the reinsurance backstop.”
But, the source said, “even if he no longer occupies the ranking position, lobbyists who would think about crossing him do so at great peril. Like the previous iterations of TRIA, resolution is going to be achieved through consensus–not anybody rolling anybody else on the Senate Banking Committee.”