Texas Governor signs Alliance-sponsored fraternal solvency legislation...
On Monday, June 10, 2019, Texas Governor Greg Abbott signed HB 1251, the Alliance-sponsored fraternal solvency bill, into law. This is a significant victory for the American Fraternal Alliance, as enactment of enhanced fraternal solvency legislation is among the organization’s most important strategic objectives. With the Governor’s signature Texas becomes the second state to enact an Alliance-sponsored solvency bill – Minnesota lawmakers enacted a similar measure in 2018 – and the third state overall to put such regulation in place. Illinois enacted a similar statute in 2014 but under far different conditions. The Illinois statute, as initially introduced, called for the formation of a fraternal guaranty association. It required deft negotiations with regulators on the part of the Alliance to transform the proposal into the cornerstones of our own fraternal solvency oversight bill.
The enactment of the Texas legislation demonstrates what a trade association – even a small one like the Alliance – can accomplish when it focuses its efforts and marshals its resources. This victory was attributable to many factors, including:
- A courageous and committed Board of Directors – After a long, and at times, contentious debate the Alliance Board adopted a bold policy position in support of enhanced fraternal solvency oversight in September 2017. Since that time the Board has made enactment of this type of legislation one of its most important goals and has backed that up by allocating funds to retain the resources – primarily legislative drafting expertise and local counsel in key states – to achieve the objective.
- A superior legislative drafter – The Alliance’s retained counsel, Todd Martin of Stinson Leonard, patiently worked with the Texas Department of Insurance to develop legislative language that was acceptable to regulators, complied with all other Texas statutes and regulations, and accomplished the Alliance’s objectives. In a word, Todd’s efforts were masterful.
- A terrific state lobbying team – Kim Yelkin of Foley Gardere, ably assisted by John Spheri, performed magnificently throughout this effort. They first earned the support of the DOI (no easy task), selected two well-respected lawmakers – one “D” and one “R” – to sponsor our bill, and guided the measure through the incredibly tight deadlines of the Texas legislature to reach the Governor’s desk on the last day of the session. Remember, had we failed in 2019, we would not have another bite at the apple until 2021.
- Active and engaged members – All five CEO’s of the Alliance’s Texas-domiciled members were actively engaged in the advocacy effort, writing letters to state legislators to keep the bill moving early in the session, and then writing eloquent letters to the Governor urging him to sign the bill. Without the strong support and grassroots engagement of the Alliance’s domestic members, this notable victory could not have been accomplished.
Congratulations to all who participated in this effort. We hope to have similar legislation enacted in Pennsylvania and Wisconsin by the end of this year and expand our efforts to put the measure in place in other states with multiple domestic fraternals in 2020. Active engagement of Alliance members at the grassroots level in each of those states is the most critical component to our success. I look forward to working with you on these initiatives.
Joe Annotti with Kim Yelkin and John Spheri of Foley Gardere at the Alliance's regional Meet & Eat in Texas