This week, the “Business of Insurance Regulatory Reform Act" was reintroduced in the U.S. Senate by Sen. Tim Scott (R-South Carolina) and Sen. Joe Manchin (D-West Virginia) and in the U.S. House of Representatives by Rep. Bryan Steil (R-Wisconsin).

Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act exempted the business of insurance from the purview of the Consumer Financial Protection Bureau (CFPB) and reiterated that the regulation of insurance had been delegated to the states.

However, the National Association of Insurance Commissioners (NAIC) has stated that the “CFPB has sought to test the limits of its authority in several instances relating to insurance despite the deference to state insurance regulators' authority contained in the Dodd-Frank Act," which follows a pattern by government entities, including the Federal Trade Commission and Department of Labor, trying to exert more power than they have been given.

The “Business of Insurance Regulatory Reform Act" would clearly define the authority of the CFPB over activities with respect to the business of insurance. Specifically, it would prevent the CFPB from pursuing enforcement against any person regulated by a state insurance regulator and offering a consumer financial product or service to the extent that person is engaged in the business of insurance.

The state-based system of insurance regulation has been effective in promoting consumer protection. By further clarifying the limits of CFPB's regulatory authority and affirming the presumption of exclusive authority of a state insurance regulator, this legislation will create certainty for insurers, agents, and consumers that there will not be duplicative or conflicting consumer protection regulations in the future.

The Big “I" joined several industry trade groups and sent a letter to Sen. Scott to express support for the legislation and his leadership on protecting the state-based system of insurance.

The Big “I" will continue to advocate for independent insurance agents and provide updates through the News & Views e-newsletter.

Raaed Haddad is Big “I" director of federal government affairs.