By Rob Smith, NAIFA President
A March 5 NAIFA Blog post noted the favorable coverage that NAIFA’s grassroots government affairs program received in the March 1 issue of InsuranceNewsNet (INN). INN editor in chief Steven A. Morelli sought input from real NAIFA members and lobbyists to showcase the historical role that NAIFA’s members and staff have played in creating and preserving the life insurance and annuity tax benefits that help financially secure 75 million American families.
A read of the full article also introduces a phenomenon that can easily blunt any government relations program—complacency. One highly regarded industry observer was quoted in the article as saying: “I have taken the view that until the dotted line is signed, it is nothing. Until they actually sign it in to law, I would not get too excited.”
For those of you old enough to remember former Dallas Cowboy quarterback “Dandy” Don Meredith and the early years of Monday Night Football, waiting until the “dotted line is signed” would be the equivalent of singing Dandy Don’s then famous serenade when the outcome of a game was assured: “Turn out the lights, the party’s over.”
It’s easy to assume that the current tax laws for life insurance and annuities are carved in stone and that to suggest otherwise is crying wolf. But, facing ever more difficult budget choices, Congress has been cutting back. A recent example is the Affordable Care Act’s 3.8 percent tax on the investment income—including annuity payments—of “high income” people. High income people today, moderate income people tomorrow. Annuities today, life insurance tomorrow.
Knowing that bad things can happen to good tax provisions, NAIFA is always alert to that possibility. The budget/tax situation has been growing (mostly) dire for over 40 years. For NAIFA to ignore the threat to life insurance and annuity tax policy would amount to association malpractice.
So, kudos to the NAIFA members who will be attending the April 8-9 Congressional Conference. And congrats to the key legislative contacts who recently made fly-ins to D.C. and regularly walk in to the district offices. For other NAIFA members, stay alert to the possibility of a general grassroots call to arms. Remember, a good offense is the best defense—in football and government relations.