Montana Congressman Troy Downing — Let’s Beef Up State Insurance Regulation

In 1945 Congress approved the McCarren-Ferguson Act and it was signed into law by President Franklin D. Roosevelt on March 9th of that year. The law unequivocally gave the states authority over the regulation of insurance.

Period.

The Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 established the Federal Insurance Office (FIO) to give the federal government some teeth when it comes to the regulation of insurance. It has been a big concern of state insurance regulators and of the PIA and other insurance associations and groups.

Last year Montana Republican Representative Troy Downing — who, at one time was Montana’s insurance commissioner — introduced the Federal Insurance Office Elimination Act. He said Dodd-Frank gave the FIO “the authority to monitor all aspects of the insurance sector.”

That clearly violates the spirit of McCarren-Ferguson.

The Federal Insurance Office Elimination Act did not get approved so Rep. Downing has changed strategy and introduced the McCarren-Ferguson Restoration Act. It, too, will eliminate the Federal Insurance Office.

Also, instead of being an advisor, Downing’s bill gives the insurance representative on the Dodd-Frank established Financial Stability Oversight Council (FSOC) a vote on FSOC decisions.

This is critical when the FSOC is considering decisions affecting insurance.

“The Federal Insurance Office exists in spite of the fact that the regulation of insurance has and always will belong to the states,” Rep. Downing said. “FIO is a duplicative federal bureaucracy that hinders the efforts of state regulators better equipped to address the insurance needs of their communities. The McCarran-Ferguson Restoration Act affirms this by eliminating the Federal Insurance Office while preserving some of its key features, delivering greater clarity for U.S. insurance regulation.”

Downing’s bill has the support of PIA National and the PIA Western Alliance.

“The PIA Western Alliance supports the McCarran-Ferguson Restoration Act. It reaffirms states as the primary regulators of insurance and restores the proper balance between state and federal oversight,” PIA Western Alliance Executive Vice President Kim Legato said. “Eliminating the Federal Insurance Office while preserving a limited Treasury role and granting voting rights to the state-based representative on FSOC strengthens regulatory clarity and financial stability. We urge our members to contact their congressional representatives to advance this bill.”

PIA National CEO Mike Skiados agrees.

“The McCarran-Ferguson Restoration Act safeguards the proven state-based system of insurance regulation by repealing the Federal Insurance Office — an unnecessary federal bureaucracy created under the 2010 Dodd-Frank Act,” Skiados said. “For more than a century, state regulators have effectively protected both consumers and the insurance marketplace, and they remain best positioned to do so moving forward. PIA appreciates Rep. Troy Downing for his leadership and commitment to preserving the state insurance regulatory system.”

The National Association of Insurance Commissioners (NAIC), the National Association of Mutual Insurance Companies (NAMIC) and the American Property Casualty Insurance Association (APCIA) also support Rep. Downing’s bill.

Virginia Insurance Commissioner Scott White is the current president of the NAIC. He said the McCarren-Ferguson Restoration Act will restore a proper balance between the states and the federal government.

“Insurance regulation has always been, and should always remain, a state responsibility,” White said.”This legislation eliminates a federal office that conflicted with that framework, while preserving a focused, non-regulatory role for Treasury to engage internationally and defend the U.S. system of state-based supervision. It reinforces regulatory clarity and respects the model that has successfully protected policyholders for more than a century and a half.”

Jimi Grande of NAMIC said in 1945 McCarren-Ferguson made it very clear who should regulate insurance.

"Rather than informing federal policymakers, the Federal Insurance Office has for years duplicated the work of state regulators, routinely exceeding statutory guidance and inflicting burdensome costs that are ultimately paid by consumers,” Grande said. “As a former state insurance commissioner, Congressman Downing knows this all too well, and NAMIC appreciates his leadership in stopping this wasteful federal overreach.”

The APCIA — like the PIA and NAMIC — has been highly critical of the FIO.

"The McCarran-Ferguson Restoration Act is a critical measure to preserve the strength of our state-based system of insurance regulation — a framework that has protected consumers and ensured market stability for decades,” Sam Whitfield, APCIA’s senior vice president of federal government relations and political engagement said. “The bill also equips the Treasury Department with tools to advocate for this proven system internationally, while appropriately eliminating unnecessary powers of the Federal Insurance Office. APCIA thanks Rep. Downing for his leadership and commitment to working collaboratively with stakeholders to advance this important legislation.”

Here is a link to see the McCarren-Ferguson Restoration Act bill: https://bit.ly/4pKuLrt

Source link: Congressman Troy Downing — https://bit.ly/45lVsvu

Source: NAIC — https://bit.ly/49N66wD