House Committee Moves ‘CHOICE Act’

Earlier this week, the U.S. House of Representatives Financial Services Committee sent H.R. 5983, the “Financial CHOICE Act,” to the full House for consideration in a 30-26 vote.

The vote fell mostly along party lines: Every Democrat member of the committee and one Republican voted against the legislation. Regardless of the committee’s action, the legislation is not expected to advance further before the end of the year.

Introduced by Committee Chairman Jeb Hensarling (R-Texas), the legislation is a proposal to reform the financial services regulatory system. The plan would repeal, revise or replace many sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Of note, Title V of H.R. 5983 seeks to combine the Federal Insurance Office (FIO) and the Financial Stability Oversight Council (FSOC) Independent Member with insurance expertise to create the Office of the Independent Insurance Advocate (IIA).

The Big “I” is concerned that combining the FIO and FSOC Independent Member into the IIA may lead to unintended consequences for state insurance regulation. For decades, the Big “I” has supported state regulation of insurance. The association strongly opposes any form of federal regulation of insurance, whether optional, mandatory or dual.

Although the Big “I” has some concerns about Title V of the legislation, a different section of the legislation includes text that is similar to a bill the association supports: H.R. 1090, the “Retail Investor Protection Act” by Rep. Ann Wagner (R-Missouri). This provision would repeal the Department of Labor’s fiduciary rule and restrict the agency from issuing similar regulations until the Securities and Exchange Commission has addressed the issue.

Part of the bill seeks to create greater transparency for federal regulators involved in international financial negotiations by requiring public comment periods and increased reporting to Congress. The Big “I” supports similar legislation as it relates to international insurance negotiations undertaken by the FIO, contained in H.R. 5143, the “Transparent Insurance Standards Act of 2016” by Rep. Blaine Luetkemeyer (R-Missouri).

Jennifer Webb is Big “I” federal government affairs counsel.