The insurance debate during development of the Dodd-Frank Wall Street Reform and Consumer Protection Act was focused on the creation of an entity within the federal government that would serve as an information resource for Congress and the administration in the designing and implementing of economic policy and trade negotiations.
To that end, the Federal Insurance Office was created within the Treasury Department and was tasked with monitoring all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurance that could contribute to a systemic economic crisis.
The office is responsible for the following:
Collecting and analyzing data on insurance
Advising the secretary of the treasury on major domestic and international policy issues
Reporting to Congress annually
Establishing federal policy on international insurance matters
Ensuring state insurance laws remain consistent with federal policy in coordinating international trade agreements
The office was granted joint authority along with the Treasury and the Office of the U.S. Trade Representative to preempt state law only as part of a covered international agreement where state law directly results in less favorable treatment for a non-U.S. insurer. However, the office will be prohibited from preempting state laws or regulations relating to an insurer’s rates, premiums, underwriting or sales practices, or state coverage requirements for the capital or solvency of an insurer.
Most importantly, the office is expressly prohibited against exercising general supervisory or regulatory authority over the business of insurance. Throughout the legislative debate, NAMIC worked closely with congressional leaders to ensure that the final bill strictly limited the office’s ability to preempt state laws, greatly restricted the office’s subpoena authority, and explicitly maintained that the office would not have regulatory or supervisory authority.
Abstractly discussing the idea of an office with insurance expertise existing at the federal level can lead to good arguments in favor. However, seven years of real-world experience has led many people in Washington, from industry stakeholders to Congress, to contemplate the future of the FIO.
Based on its experience with the FIO, NAMIC has concluded the office adds little value to the U.S. insurance system, policyholders, or taxpayers. The experiment has been a failure, and the time has come to eliminate the FIO. NAMIC opposes continuing the existence of a federal office that has demonstrated it is both duplicative and unnecessary.
July 20, 2020 The Financial Services and General Government Appropriations Subcommittee voted to direct the Federal Insurance Office “to examine the impact of non-driving related factors, such as a consumer’s credit history, homeownership status... Read more
October 21, 2019 The U.S. Department of Treasury Federal Insurance Office published its 2019 Annual Report. The report is divided into five categories... Read more
September 30, 2019 The Treasury Department’s Federal Advisory Committee on Insurance convened Sept. 23 for a meeting at which it was provided updates from its three subcommittees and Federal Insurance Office Director Steven Seitz. Seitz’s update touched on... Read more
September 27, 2019 The National Association of Mutual Insurance Companies applauded the introduction of legislation to protect state-based insurance regulation from being undermined by international regulatory standard-setting bodies. The International Insurance... Read more
September 23, 2019 The Senate Appropriations Committee approved its fiscal year 2020 spending bill Sept. 19, which funds Treasury, the Judiciary, the Executive Office of the President, and numerous independent agencies. The bill recommends an increase of $773 million... Read more