U.S. Sen. Tim Scott (R-SC) led a group of senators in introducing legislation that seeks to clarify that the enforcement of the insurance industry remains with state regulators, as opposed to the Consumer Financial Protection Bureau.
Specifically, the bill on the Business of Insurance Regulatory Reform Act would prevent the CFPB from pursuing enforcement against any person regulated by a state insurance regulator and offering a consumer financial product or service.
By clarifying the limits of CFPB’s regulatory authority and affirming the exclusive authority of a state insurance regulator, this legislation would create certainty for insurers, agents, and consumers that there will not be duplicative or conflicting consumer protection regulations in the future.
“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,” Scott said.
The bill was cosponsored by U.S. Sens. Mike Rounds (R-SD), Cynthia Lummis (R-WY) Pete Ricketts (R-NE), and Bernie Moreno (R-OH).
The bill is supported by 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.
“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,” Lummis said.
U.S. Rep. Bryan Steil (R-WI) introduced companion legislation in the U.S. House of Representatives.
“State insurance regulators have a strong track record of effective regulation of the insurance industry,” Steil said. “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.”