A bill recently reintroduced in both chambers of Congress seeks to limit the Consumer Financial Protection Bureau’s (CFPB) regulatory authority over insurance-related activities. The legislation, titled the Business of Insurance Regulatory Reform Act, aims to affirm the longstanding regulatory role of states in overseeing the insurance sector and prevent potential jurisdictional overlap with federal financial oversight agencies.
Scope and Intent of the Legislation
The bill proposes to prohibit the CFPB from applying its regulations to entities engaged in the business of insurance if those entities are already regulated by state insurance commissioners. This restriction would apply even in cases where the entities also offer consumer financial products or services, as long as their primary activity falls within the realm of insurance.
Representative Bryan Steil (R-Wis.) reintroduced the bill in the House of Representatives. He noted that the legislation is designed to reinforce congressional intent established in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which explicitly excluded the “business of insurance” from the CFPB’s purview under Title X.
“Unfortunately, the CFPB has tried to expand its authority without any accountability,” Rep. Steil said. “It’s time for the bureau to return to the boundaries set by Congress.”
Senator Tim Scott (R-S.C.) introduced the companion bill in the Senate.
Background and Regulatory Concerns
Supporters of the bill cite ambiguity in the language of the Dodd-Frank Act as a source of regulatory uncertainty. While the Act includes provisions to exclude insurance from CFPB oversight, critics argue that the CFPB has, in practice, interpreted its mandate too broadly.
The bill also references the McCarran-Ferguson Act of 1945, a statute that grants states primary authority to regulate insurance. Advocates of the new legislation argue that reaffirming the limits of federal intervention is necessary to maintain regulatory clarity and efficiency.
Industry and Bipartisan Support
Several national insurance trade groups have expressed support for the legislation. These include:
- American Council of Life Insurers (ACLI)
- National Association of Mutual Insurance Companies
- American Property Casualty Insurance Association
- National Association of Professional Insurance Agents
- Independent Insurance Agents and Brokers of America
In a joint letter to Rep. Steil and Sen. Scott, these organizations asserted that clarifying the CFPB’s limits would help avoid duplicative or conflicting consumer protection regulations.
David Chavern, President and CEO of ACLI, emphasized the capabilities of state regulators to effectively manage insurance oversight, particularly during periods of economic uncertainty or crisis.
Senator Joe Manchin (D-W.Va.) has also endorsed the bill, framing it as a bipartisan initiative that protects state regulatory authority while ensuring the CFPB adheres to its designated role.
Legislative History and Next Steps
The current proposal mirrors a previous version of the bill introduced during the 2017–2018 congressional session. Although that earlier iteration passed through committee, it did not advance to a full vote in either the House or the Senate.
The renewed legislative effort underscores ongoing debates over the appropriate boundaries of federal financial regulation and the preservation of a state-led framework for insurance oversight. The bill’s progress will be monitored closely as it moves through the legislative process.
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