The National Association of Mutual Insurance Companies (NAMIC) is supporting a bill first introduced more than 18 months ago to limit the authority of the Consumer Financial Protection Bureau and protect state regulation of the insurance industry.
Rep. Bryan Steil, R-Wis. and Sen. Tim Scott, R-S.C., introduced companion bills in the House and Senate in January 2024. It was first heralded as a bi-partisan bill, with former Sen. Joe Manchin of West Virginia a co-sponsor. The measure, the Business of Insurance Regulatory Reform Act, introduced again this month, has been referred to the Senate’s Committee on Banking, Housing, and Urban Affairs, where Scott sits as chair.
The bill “limits the authority of the Consumer Financial Protection Bureau (CFPB) over entities that are regulated by a state insurance regulator.”
“Specifically, the bureau is prohibited from pursuing enforcement against any person regulated by a state insurance regulator and offers a consumer financial product or service, to the extent that the person is engaged in the business of insurance. If a person engaged in the business of insurance is regulated by a state insurance regulator but is otherwise subject to the bureau’s enforcement authority, the bureau must construe its authority narrowly” according to a summary of the bill.
For NAMIC’s Jimi Grande, senior vice president of federal and political affairs, the argument is simple. In a letter to Scott, Grande wrote, “Insurance has been successfully regulated at the state level for over 150 years.”
The CFPB was formed as part of the Dodd-Frank Act in 2010 but has since—according to the bill’s authors and insurance industry lobbying groups—cut in on state-regulated business of insurance, which was excluded from the CFPB’s purview when it was created.
CFPB has “taken concerning actions and threatened to engage on issues that involve products and services” regulated by the states. Grande said language within Dodd-Frank clearly excludes the business of insurance from CFPB’s power, and the “important legislation” makes the point “even more explicit” that CFPB must defer to state regulators when it comes to consumer protection of policyholders.
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