A Bill to — again — limit Federal Interference into Insurance Regulation

The Business of Insurance Regulatory Reform Act was introduced in Congress again this month. It was originally introduced in January of 2024. The main sponsor is Republican Sen. Tim Scott of South Carolina.

A companion bill has been reintroduced in the House of Representatives by Republican Rep. Bryan Steil of Wisconsin.

The senate bill has been referred to the Senate’s Committee on Banking, Housing, and Urban Affairs. That’s the committee chaired by Scott.

Both bills limit the authority of the Consumer Financial Protection Bureau (CFPB) over state entities with the authority to actually regulate insurance. Here’s language from the senate bill’s summary.

“Specifically, the bureau is prohibited from pursuing enforcement against any person regulated by a state insurance regulator and offers a consumer financial product or service, to the extent that the person is engaged in the business of insurance,” the bill’s conclusion states. “If a person engaged in the business of insurance is regulated by a state insurance regulator but is otherwise subject to the bureau’s enforcement authority, the bureau must construe its authority ‘narrowly.’”

PIA National CEO Mike Skiados praised the efforts of the senator and the representative, and their supporters, and their focus on making sure regulation stays at the state level.

“The PIA applauds Senator Tim Scott and Rep. Bryan Steil for their introduction of the Business of Insurance Regulatory Reform Act and their commitment to preserving insurance's state-based regulatory framework,” Skiados told Weekly Industry News. “The McCarran-Ferguson Act of 1945 delegates the regulation of most insurance issues to the states, where the local expertise has benefited consumers and the industry alike for over a century.”

As for the independent agents of the PIA, they don’t need regulated by the CFPB or any federal agency.

“PIA and its member agents have long prioritized the consumers. Independent insurance agents are immersed in the communities they serve and excel in providing the highest possible level of coverage and service when the consumer needs it most,” Skiados added. “Thanks to the longstanding and successful state-based regulatory system, consumers are protected and agents have the tools to deliver when disaster strikes.”

National Association of Mutual Insurance Companies (NAMIC) spokesman, Jimi Grande, agrees and said insurance has been successfully regulated at the state level for over 150 years.

“State regulators are accountable to consumers and best know their communities, laws and markets,” Grande said. “Congress tried to make it clear in establishing the CFPB that the states, not the bureau, have authority over the insurance industry. Unfortunately, as is all too common in Washington, the bureau has tried to overstep its limits and expand its powers. The Business of Insurance Regulatory Reform Act will reassert those boundaries and ensure a better system for American consumers.”

Along with the American Property Casualty Insurance Association (APCIA) and the Council of Insurance Agents and Brokers (CIAB), PIA National signed onto a letter that NAMIC sent to Congress supporting the bill. 

It says states have been very effective in keeping consumers safe and insurers in line. This legislation will “create certainty for insurers, agents, and consumers that there will not be duplicative or conflicting consumer protection regulations in the future.”

Source link: Insurance Journal — https://bit.ly/40Qybzv

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