Advoacy in Action

How One Conversation Led to Legislative Change

By John Savant, IA&B Government Affairs Director

More often than not, legislative advocacy is all about playing defense – avoiding receiving collateral damage as a result of some other group’s competing legislative agenda. There are countless examples of this – including the recent proposals to eliminate credit and gender as rating factors, and efforts by other lobbying groups to make EUIM a mandatory coverage for auto policies, dramatically increasing premiums in the process. However, one bill in the most recent Delaware legislative session serves as an example of how the day-to-day experiences of a few agents can lead to legislative victories for our entire profession.

In late 2021, an IA&B member from Delaware contacted the association and brought up an issue that one of his policyholders had run into. The account in question involved a family that owned several businesses together, all separate legal entities: a commercial real estate management company, a commercial contracting business, a homebuilder, and a chain of self-storage facilities. All six family members were covered by workers’ compensation through a separate management company and would have preferred to be excluded from workers’ compensation for several of the other LLCs. However, the state of Delaware only allowed up to four officers of an LLC to be excluded from a company’s workers’ compensation policy, and carriers were charging premium using the minimum member payroll for the remaining two family members.

The issue was brought to IA&B’s Delaware Government Relations Committee, a group of IA&B volunteers who meet regularly to discuss proposed legislation and determine what position the association should take on a given bill. During the meeting, several committee members had said they had experienced or heard of similar situations, and it was agreed that IA&B would pursue a legislative solution. A draft bill increasing the number of allowable exclusions for LLCs from four to eight was written – the number chosen in part because it matched the eight executive officer exclusions the law permitted for corporations, and it would therefore likely be an easier sell to legislators.

IA&B’s lobbying team met with industry stakeholders and various government agencies, including the Delaware Department of Labor, to directly address any concerns they may have, and sort them out in advance of the bill’s introduction. Legislators often turn to regulators to help them make sense of issues they may be unfamiliar with, and any last-minute objections or amendments can dramatically slow down a bill’s passage – or halt it entirely. Fortunately, no major concerns were raised, and the DOL indicated that they would not stand in the way of the bill’s passage. At this point, it was too late to have a reasonable chance of passing before the 2022 legislative session ended in June, so the decision was made to wait for the 2023 session.

In the meantime, with 2022 being an election year, IA&B took the opportunity to tip the scales in our favor by influencing the makeup of the legislature itself. Between yard signs, mailers, and many other expenses, electoral campaigns cost money. AgentPAC contributed to the campaigns of several key lawmakers with a record of understanding small business owners and supporting IA&B’s position on other insurance-related issues, boosting their ability to campaign and their chances of being re-elected. Had these friendly legislators lost their election, we would’ve faced an uphill battle to find someone to champion our position on this issue and many others.

In order for any proposal to become an actual bill, it must be sponsored by at least one legislator who is willing to introduce it. With the new year came a new two-year session of Delaware’s General Assembly, and IA&B’s staff and lobbyists went to work to explain the issue to legislators and secure sponsors. A February 16th meet-and-greet between agents and lawmakers in Dover hosted by IA&B offered an opportunity to bring up the issue with Representative Bill Bush and Senator Spiros Mantzavinos, the chairs of the Insurance Committees in their respective chambers. Both Bush and Mantzavinos had been consistent allies on insurance-related issues in the past, and soon after the meeting, they agreed to sign on as the bill’s primary sponsors.

IA&B’s Government Relations Committee Chair Lee Dotson testified on House Bill 144 when it came up for consideration in committee. Once voted out of committee, IA&B’s lobbying team worked with the sponsors to encourage House leadership to put the bill on the agenda for a vote in the full House in early June. The bill passed the House with 40 “yes” votes, and one legislator absent, and would follow a similar path in the Senate. Once again, securing the chair of the Senate Banking and Insurance Committee as a sponsor helps to ensure that your bill has its day in the sun.

House Bill 144 would undergo final passage in the Senate on June 20th, just 10 days before the end of 2023 session. It was subsequently signed into law by Governor Carney, a year and a half since the issue originally came up in an IA&B meeting.

IA&B’s advocacy team has the expertise needed to move legislation, but it is you, the independent agents, with the crucial firsthand knowledge of where the pain points are for policyholders. We can’t fix what we don’t know is broken. House Bill 144 would not exist without the IA&B members who originally brought the issue to light. So, the next time you encounter a problem due to a certain law or regulation, contact IA&B’s advocacy staff. You might just be the catalyst for future legislative changes that benefit not only yourself and your policy holders, but all fellow agents as well.

Reach IA&B Government Affairs Director John Savant at JohnS@IABforME.com or 717-918-9214.