The National Association of Mutual Insurance Companies (NAMIC) is backing a bill that aims to limit the power of the Consumer Financial Protection Bureau (CFPB) over the insurance industry. The bill, first introduced over 18 months ago and reintroduced in January 2024, seeks to reinforce state control over insurance regulation.
Republican lawmakers Rep. Bryan Steil from Wisconsin and Sen. Tim Scott from South Carolina have introduced matching bills in the House and Senate. Initially, the bill saw some bipartisan support, including from former Sen. Joe Manchin of West Virginia. Now, it has gained sponsorship from Sens. Mike Rounds, Cynthia Lummis, Pete Ricketts, and Bernie Moreno, all Republicans.
The measure, known as the Business of Insurance Regulatory Reform Act, is currently under review by the Senate’s Committee on Banking, Housing, and Urban Affairs, chaired by Sen. Scott. Its main goal is to restrict the CFPB from taking enforcement actions against companies regulated by state insurance authorities when these companies offer insurance-related products or services.
In simple terms, if a company falls under a state insurance regulator’s purview, the CFPB cannot step in or must limit its authority in any enforcement matters. NAMIC’s senior vice president of federal and political affairs, Jimi Grande, highlighted the long history of state regulation in insurance. He reminded the Senate chair that for over 150 years, states have managed this role effectively.
The CFPB was created in 2010 as part of the Dodd-Frank Act. However, insurance was initially excluded from its authority. Still, industry groups say the CFPB has increasingly involved itself in areas traditionally regulated by states. They worry this could lead to overlapping rules and confusion.
Several other associations, including the American Property Casualty Insurance Association and the Council of Insurance Agents and Brokers, have also voiced support for the bill. They believe that keeping regulation at the state level protects consumers better and avoids conflicting rules that could confuse insurers, agents, and customers alike.
This bill aims to make it clear that states should remain the main authority over insurance, helping maintain a clear and consistent system. As the Senate committee examines the proposal, it will be important to see how this balance between federal and state roles will be maintained going forward.