U.S. Sens. Marsha Blackburn (R-TN), Ted Cruz (R-TX), Mike Lee (R-UT) and Rand Paul (R-KY) have introduced legislation that would return sole regulatory authority over the insurance industry to the states.
The Federal Insurance Office Abolishment Act would abolish the Federal Insurance Office (FIO) within the U.S. Department of the Treasury, and return its regulation back to the states, the lawmakers said.
“Insurance regulation has long been, and should remain, a responsibility of the states,” Blackburn said. “The Federal Insurance Office Abolishment Act would eliminate unnecessary federal overreach, cut red tape, and return power to the states.”
In 1945, Congress passed legislation that solidified states’ regulatory authority over the insurance industry. In 2008, however, following the 2008 financial crisis, the Federal Insurance Office was created, granting the office specific financial stability, monitoring and international responsibilities. However, the law makers said, the responsibilities duplicate functions also held at the state level.
“The Federal Insurance Office is a redundant, ever-expanding, unaccountable entity that infringes upon states’ authority to regulate the insurance industry,” Cruz said. “This legislation will rein in bureaucratic overreach by the federal government and empower state regulators to focus on what is best for consumers in their states.”
The legislation would eliminate the FIO and return sole regulatory authority for the insurance industry over to the states.
“The Federal Insurance Office does not need to exist. It’s an Obama-era expansion of the federal bureaucracy created to intrude on states’ rights,” Lee said. “Our bill will formally abolish this needless expense and return insurance regulation to the states, where it has always belonged.”