Scott, Colleagues Lead Effort to Protect State-Based Insurance System, Prevent Future CFPB Overreach
Washington, D.C. – Chairman Tim Scott (R-S.C.) led his colleagues in reintroducing legislation that protects our nation’s state-based insurance regulatory system and ensures future administrations cannot weaponize the Consumer Financial Protection Bureau (CFPB) against the insurance industry, as was done during the Biden administration. Senators Mike Rounds (R-S.D.), Cynthia Lummis (R-Wyo.) Pete Ricketts (R-Neb.), and Bernie Moreno (R-Ohio) joined Chairman Scott on the Business of Insurance Regulatory Reform Act, which clarifies the jurisdiction granted to the CFPB by the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and affirms that state insurance regulators are best positioned to oversee insurers and safeguard the interests of consumers.
“With over two decades of experience in the insurance industry, I understand the importance of our state-based insurance system. This bill is critical to building on Senate Republicans’ recent efforts to curb CFPB overreach and will help prevent future administrations from weaponizing the Bureau. By providing regulatory clarity to state regulators, insurers, agents, and consumers, we are ensuring that fair and competitive markets remain free from bureaucratic overreach in Washington,” said Chairman Scott.
“The U.S. system of state-based insurance regulation is the gold standard when it comes to protecting our insurance markets and insurance consumers in South Dakota and across the country,” said Senator Rounds. “The CFPB has a history in past democratic administrations of trying to exceed their statutory authority to regulate the insurance business. I’m pleased to introduce this legislation with Chairman Scott to protect our state-based insurance systems from the overreach of the CFPB.”
"States have successfully overseen insurance markets, fostering innovation while protecting consumers through local expertise and accountability for more than a century. This legislation reinforces that proven framework by establishing clear boundaries for federal agencies and ensuring that insurance regulation remains where it belongs: with state commissioners who best understand their markets. I'm pleased to support this bipartisan effort to preserve the regulatory structure that has served American families and businesses so well,” said Senator Lummis.
Congressman Bryan Steil (R-Wis.) is leading companion legislation in the U.S. House of Representatives.
“State insurance regulators have a strong track record of effective regulation of the insurance industry,” said Congressman Steil. “When Congress created the CFPB, it excluded the insurance business from the Bureau's mandate, avoiding a top down, one-size fits all approach from Washington. Unfortunately, the CFPB has tried to expand its authority without any accountability. This legislation makes it clear to the CFPB that it has no authority to regulate the business of insurance. It’s time for the Bureau to return to the boundaries set by Congress, and this bill is a step forward in making sure it does.”
BACKGROUND:
Title X of the Dodd–Frank Wall Street Reform and Consumer Protection Act created the CFPB and granted the Bureau the authority to regulate “financial products or services.” Congress preserved the regulatory power over the business of insurance to the states through the McCarran-Ferguson Act of 1945, and in Dodd-Frank, excluded the “business of insurance” from the CFPB’s purview over “financial products or services.”
However, under the Biden administration, the CFPB acted outside the scope of its authority by taking a number of actions against state-regulated insurance entities engaged in the business of insurance. This legislation will clarify that enforcement of the insurance industry remains the power of state regulators, not the CFPB.
The American Council of Life Insurers, American Financial Services Association, American Land Title Association, American Property Casualty Insurance Association, Consumer Credit Industry Association, Council of Insurance Agents and Brokers, Independent Insurance Agents & Brokers of America (Big “I”), National Association of Insurance and Financial Advisors, National Association of Mutual Insurance Companies, National Association of Professional Insurance Agents, The Surety & Fidelity Association of America, U.S. Chamber of Commerce, America’s Credit Unions, The Carolinas Credit Union League, Defense Credit Union Council (DCUC), Wholesale & Specialty Insurance Association (WSIA), National Cooperative Business Association CLUSA International (NCBA CLUSA), and TruStage all voiced support for the bill. To read all the letters of support, click here.
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