For those of you who keep up with federal politics, you may have seen the “Business of Insurance Regulatory Reform Act” reintroduced by Senators Tim Scott (R-S.C) and Joe Manchin (D-W.V).
You may be asking what does this mean for your business? Will this affect our current regulatory environment? Or why is it needed?
The sponsors introduced this legislation to protect our current regulatory system and the industry from federal overreach. The primary concern from the sponsors is overreach from the Consumer Financial Protection Bureau. The CFPB was formed as part of the Dodd-Frank Act in 2010 but has since—encroached on the state-regulated business of insurance, which was excluded from the CFPB’s jurisdiction when it was created.
The CFPB has acted outside the scope of its authority by taking several actions against state-regulated insurance entities engaged in the business of insurance. Due to the CFPB’s overreach, this legislation was brought forward to clarify that enforcement of the insurance industry remains the power of state regulators.
The efficacy of our state-centered insurance regulation system in safeguarding consumer interests has proven to be consistently effective. Through this legislation, the sponsors plan to bolster this effectiveness by delineating the boundaries of the CFPB’s regulatory jurisdiction and reaffirming the primary authority of state insurance regulators. By doing so, we can ensure a clear framework that eliminates the possibility of redundant or contradictory consumer protection regulations, providing insurers, agents, and consumers with the assurance of stability and coherence in the regulatory landscape.
The Big I immediately came out in support of the legislation alongside the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the U.S. Chamber of Commerce.
If you are interested in joining us in our advocacy efforts, there is an excellent opportunity to do so at the Big I Legislative Conference in just a few months. If you are interested in this or have follow-up questions, please get in touch with John Wells at john@ohioinsuranceagents.com.
