The Federal Insurance Office (FIO) today issued a Notice of Proposed Rulemaking (NPRM) announcing its plan to collect current and historical data from property and casualty insurers to assist FIO in its efforts to assess climate-related risk.
This action was foreshadowed by FIO’s email during the summer to insurance regulators in all 50 states, asking what data they have that would show insurance coverage, liabilities, and losses for each ZIP code in their states over the past five years. These actions stem from the executive order issued by President Biden in the spring of 2021, which tasked the FIO with assessing “climate-related issues or gaps in the supervision and regulation of insurers.”
The data collection proposal issued today is a good example of FIO’s improper and continuing overreach into the insurance sector, which is why PIA has been calling for the repeal of the FIO. The regulation of insurance is vested in the states because they are better positioned to protect consumers than the federal government.
The insurance industry has numerous venues in which states discuss and share information on best practices, so the Federal Insurance Office, and the federal government more generally, are not needed as such venues. This data collection will only serve to expand the FIO portfolio.
Just this year, we have seen similar, so-far failed efforts through the appropriations process to expand FIO oversight of areas like homeowners’ and renters’ insurance, which are properly governed at the state level. These expansive actions will continue until the FIO is no longer a threat to the state insurance regulatory system, which can only happen once it is fully repealed or meaningfully reformed.
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 FIO. Our advocacy was vital to the introduction of repeal bills in both chambers of Congress earlier this year.
As the FIO embarks on its pursuit of detailed insurer data, PIA will continue to monitor the FIO’s activities and provide comments on today’s NPRM. We will also continue to encourage Congress to repeal or substantially reform the Federal Insurance Office.