January 16, 2024

Scott, Manchin Lead Bill to Protect State-Based Insurance System, Prevent CFPB Overreach

Washington, D.C. – Today, Ranking Member Tim Scott (R-S.C.) and Senator Joe Manchin (D-W.Va.) introduced legislation to protect our nation’s state-based insurance regulatory system and ensure the Consumer Financial Protection Bureau (CFPB) does not overstep their statutory authority. Their bill, the Business of Insurance Regulatory Reform Act, would clarify the jurisdiction granted to the CFPB by the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and affirm that state insurance regulators are best positioned to oversee insurers and safeguard the interests of consumers.

“With 23 years of experience in the insurance industry, I’ve seen firsthand the value of our state-based insurance system. As the CFPB continues to overstep its authority and operate beyond its jurisdiction, this bill will protect our unique system of state-based insurance regulation that has resulted in highly competitive, fair markets across the country from unchecked bureaucrats in Washington,” said Ranking Member Scott.

“I am proud to reintroduce the Business of Insurance Regulatory Reform Act, which reaffirms the 150-year precedent of regulating insurance at the state level and keeps costs down for insurance holders,” said Senator Manchin. “This commonsense legislation would better codify the Consumer Financial Protection Bureau (CFPB)’s current boundaries and hold it to the same standard as the Federal Insurance Office, preventing CFPB from regulating the business of insurance and reminding the agency that this authority resides with states. I encourage my colleagues on both sides of the aisle to support this bipartisan legislation.”


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 explicitly gave states the regulatory power over the business of insurance through the McCarran-Ferguson Act of 1945, and in Dodd-Frank, excluded the “business of insurance” from the CFPB’s purview such “financial products or services.”

However, the CFPB has acted outside the scope of its authority by taking a number of actions against state-regulated insurance entities engaged in the business of insurance. Due to the CFPB’s overreach, this legislation is needed to clarify that enforcement of the insurance industry remains the power of state regulators, not the CFPB.

Congressman Bryan Steil (R-Wis.) is leading companion legislation in the U.S. House of Representatives.

The Business of Insurance Regulatory Reform Act is supported by the American Council of Life Insurers, the American Land Title Association, the American Property Casualty Insurance Association, the Consumer Credit Industry Association, the Council of Insurance Agents and Brokers, the Independent Insurance Agents & Brokers of America, the National Association of Insurance and Financial Advisors, the National Association of Mutual Insurance Companies, the National Association of Professional Insurance Agents, the Surety and Fidelity Association of America, the U.S. Chamber of Commerce, the Defense Credit Union Council, the R Street Institute, the National Association of Insurance Commissioners, the Carolinas Credit Union League, the National Taxpayers Union, and America’s Credit Unions.

American Property Casualty Insurance Association Senior Vice President of Government Relations Nat Wienecke said, “The Business of Insurance Regulatory Reform Act recognizes that the state-based system for insurance regulation has been effective in protecting consumers and fostering competitive insurance markets for over 150 years. This important legislation provides increased clarity on the insurance exemption and the CFPB’s boundaries.”

American Council of Life Insurers (ACLI) President and CEO Susan Neely said, “Through wars, economic turmoil, global pandemics and structural shifts in the industry, state insurance regulators have demonstrated their ability to oversee insurers and protect the best interests of consumers.  The ‘Business of Insurance Regulatory Reform Act of 2024’ makes a strong, clear statement that oversight of the business of insurance should remain the purview of the states and their proven track record of success. ACLI applauds Senator Scott, Senator Manchin and Representative Steil for introducing this important legislation.”

R Street Institute Senior Manager of Federal Affairs Anthony Lamorena said, “The Business of Insurance Regulatory Reform Act is common sense legislation that properly clarifies the jurisdiction and purview of state regulators when it comes to the business of insurance. With the responsibilities provided under the McCarran-Ferguson Act, these regulators have displayed their effectiveness in exercising their role to protect consumers. Their close proximity to these individuals best positions them to respond to their concerns instead of the Consumer Finance Protection Bureau. The R Street Institute applauds the bipartisan efforts of Sens. Tim Scott (R-SC) and Joe Manchin (D-WV) on this front, and we are happy to endorse this legislation again this Congress.”