PIA Objects to FIO Investigation of Climate-Related Insurance Risk

U.S. Treasury Department building façade in Washington, D.C.

PIA has a long history of supporting the state regulation of insurance and opposing federal insurance oversight. Since 2016, one of our annual top legislative priorities has been the repeal of the Federal Insurance Office (FIO), which was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Our advocacy was vital to the introduction of repeal bills in both chambers of Congress earlier this year.

Also earlier this year, President Biden issued an Executive Order (EO) on Climate-Related Financial Risk, which directed the Treasury Secretary to task the FIO with assessing “climate-related issues or gaps in the supervision and regulation of insurers.” We viewed the EO with concern at the time because we recognized it, potentially, as a presidentially sanctioned infringement on the existing state-based regulatory regime.

Unfortunately, our concerns were validated in September, when the Treasury Department issued a Request for Information (RFI) on the insurance sector and climate-related financial risks. The RFI set forth a series of 19 questions inviting public comment on, among other things, how the FIO should collect, assess, and disseminate data to interested stakeholders, and how it should publicize the results of its investigation into specific areas of climate-related financial risk.

In keeping with our overarching opposition to the FIO’s intrusion into the existing state insurance regulatory framework, we submitted a comment letter refuting the RFI’s premise that the FIO is the appropriate venue for such an investigation.

We look forward to working with the Treasury Department to determine the appropriateness of a climate-related financial risk assessment, and, depending on that determination, assessing climate-related financial risk within the robust state-based regulatory framework.