Big ‘I’ Supports Insurance Regulatory Reform Bills

With insurance regulatory reform legislation pending before Congress, the Big “I” recently sent letters to Capitol Hill supporting reform of the Federal Insurance Office (FIO) and the Consumer Financial Protection Bureau (CFPB).

Last week, the Big “I” sent a letter to Rep. Sean Duffy, Chairman of the U.S. House of Representatives Housing and Insurance Subcommittee, explaining the association’s support for H.R. 3861, the “Federal Insurance Office Reform Act of 2017,” introduced by Reps. Duffy (R-Wisconsin) and Denny Heck (D-Washington).

H.R. 3861 is being considered by the House Financial Services Committee today and as of press time was expected to pass out of the committee. However, a vote on the bill before the full House has not been scheduled, nor has a companion measure been introduced in the Senate.

The Big “I” supports eliminating or significantly reforming the FIO and believes that H.R. 3861 is a step in the right direction. The bill eliminates the FIO’s subpoena authority and increases coordination between the FIO and state regulators.

Since its inception the FIO has stirred controversy related to preemption of the state-regulation of insurance, particularly on international insurance issues. However, Steve Dreyer, who recently retired from the ratings firm S&P is expected to take over the helm of the FIO, which could potentially see the office take a new direction.

The Big “I” met with Dreyer to discuss FIO issues earlier this year. Previously former Illinois Insurance Director Michael McRaith held the FIO Director position, but he vacated it at the beginning of the Trump Administration.

The second letter the Big “I” sent to the hill last week expresses support for S. 2702, the “Business of Insurance Regulatory Reform Act,” and was addressed to the bill’s lead sponsors, Sens. Tim Scott (R-South Carolina), Joe Manchin (D-West Virginia), Mike Rounds (R-South Dakota) and Tammy Baldwin (D-Wisconsin).

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act exempted the business of insurance from the purview of the CFPB and reiterated that the regulation of insurance had been delegated to the states. Unfortunately, the CFPB continues to take action on products and services that fall within the exclusive regulatory authority of the states. S. 2702 would fix this problem by clarifying that the business of insurance is regulated at the state level and does not fall under the purview of the CFPB.

A companion measure to S. 2702 has also been introduced in the House.

Wyatt Stewart is Big “I” senior director of federal government affairs and Jennifer Webb is Big “I” federal government affairs counsel.