At press time, the U.S. House of Representatives is expected to pass a proposal to reform the financial services regulatory system.

If H.R. 10, the “Financial CHOICE Act,” by Rep. Jeb Hensarling (R-Texas), is signed into law, many significant sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act would be repealed, revised or replaced. Of particular importance, the proposal 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 overall intention of the “CHOICE Act” appears to be to rein in the FIO, as it contains a number of restrictions on the power of the office. While the Big “I” supports these restrictions, it is concerned that combining the FIO and FSOC Independent Member into the IIA may lead to unintended consequences for state insurance regulation by elevating the stature of the office, and giving it the potential to serve as a springboard for a day-to-day federal insurance regulator.

In short, the Big “I” supports efforts in the “CHOICE Act” that could curtail the FIO’s authority, but does not support creating the IIA.

For decades, the Big “I” has been a leading supporter of state regulation of insurance. The association strongly opposes any form of federal regulation of insurance, whether optional, mandatory or dual. As such, the association supports significantly restricting or eliminating the FIO, and will continue working with Congress as the “CHOICE Act” progresses.

While the legislation is expected to pass the House largely along party lines, its ultimate prospects are uncertain in the U.S. Senate.

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