PIA has been leading the effort to repeal the Federal Insurance Office (FIO) for years. On July 30, H.R. 4866, the Federal Insurance Office Abolishment Act of 2021 was reintroduced in the 117th Congress with our strong support. The bill was introduced by Rep. Ben Cline (R-VA) and cosponsored by Rep. Tom Tiffany (R-WI). PIA also supports the Senate version of the repeal bill, which was introduced in March.
The Federal Insurance Office Abolishment Act will protect the successful state insurance regulatory system by repealing the FIO, an unnecessary federal bureaucracy created by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
PIA opposed the creation of the FIO from the outset. Many of the FIO’s duties are duplicative of other offices in the U.S. government, and, like most federal offices, since its creation, its power has increased. In its decade of existence, the FIO has sought federal regulation of mortgage insurance; inclusion in supervisory colleges, which are joint meetings of interested regulators and company officials; and uniform national standards for state guaranty associations. In addition, it has sought to administer the National Association of Registered Agents and Brokers (NARAB). Each of these acts would be an overreach by the federal government.
A recent example of the threat posed by the FIO’s continued existence is contained in the Biden administration’s recent Executive Order on Climate-Related Financial Risk, which gave climate-related assignments to both the FIO and the Financial Stability Oversight Council (FSOC), another Dodd-Frank creation. Specifically, the Executive Order (EO) directs the Treasury secretary to have the FIO “assess climate-related issues or gaps in the supervision and regulation of insurers…” If an inquiry into the potential effects of climate change on the stability of the insurance industry is justified, it should be undertaken at the state level by state insurance regulators, not the federal government. This EO is another example of opponents of state insurance regulation using the FIO as a means of improperly asserting federal authority over the insurance industry.
In November 2016, PIA became the first national insurance association to publicly call for the repeal of the FIO. Since then, we helped develop the Federal Insurance Office Abolishment Act and have continued to build support for it.
Thanks to the advocacy of engaged PIA members from Virginia and Wisconsin during our 2021 Advocacy Day, Reps. Cline and Tiffany recognized the importance of this issue and the need for its reintroduction. This bill’s introduction is a testament to the value of true grassroots advocacy, and, as ever, we are thankful to our members for their hard work and enthusiastic support.
PIA will continue to build support for this legislation in both the House and Senate throughout the 117th Congress.