On September 18 Rep. Scott Fitzgerald (R-WI) introduced H.R. 5535, the Insurance Data Protection Act with PIA’s strong support. This legislation will meaningfully reform the Federal Insurance Office (FIO), an unnecessary federal bureaucracy created by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. PIA’s support for the bill was noted in the congressman’s press release.

Insurance should be regulated by state authorities, not the federal government. The state insurance oversight regime has benefited consumers and industry for over a century. Plus, the FIO’s duties are duplicative of other state or federal government powers. Since its creation, which PIA opposed, the FIO’s mandate has continued to expand. In 2021, for instance, the Biden administration issued an Executive Order directing the FIO to assess climate risks to carriers and identify possible sources of coverage disruption in areas prone to weather-related loss events. In furtherance of that directive, the FIO recently announced plans to issue a granular data call on climate-related insurance risks.

The Insurance Data Protection Act would repeal the FIO Director’s subpoena and enforcement powers. Its subpoena power is the FIO’s most powerful tool, and its elimination will help to counteract the FIO’s ever-expanding authority. The bill would require the FIO to coordinate any of its data collection efforts with state insurance regulators and consult publicly available sources of the data being sought. These provisions are designed to limit unnecessary data inquiries and prevent  duplication of efforts across the federal and state regulatory landscapes, particularly in the context of work typically undertaken by the National Association of Insurance Commissioners (NAIC).

The bill would also set forth confidentiality procedures and disclosure requirements governing the way data, once collected from insurance carriers, could be used by financial regulators. Finally, it would protect consumers by limiting the sharing of non-publicly available data with or by the FIO and other federal agencies and state insurance regulators. In essence, this bill would reset the balance of power between the FIO and state insurance regulators.

In November 2016, PIA became the first national insurance association to call for the full repeal of the FIO. PIA has long led the industry in the development and support of legislation in the House and Senate that would fully repeal the FIO, and full repeal remains our goal. We will continue to forcefully advocate for the passage of the FIO Elimination Act, which, at the urging of PIA, has been introduced in both the House and Senate across multiple Congresses.

At the same time, we support practical reforms to the FIO that substantially reduce its power, particularly in domestic matters. PIA views the Insurance Data Protection Act as an important step toward the restoration of the primacy of state regulation of insurance.