On Tuesday, U.S. Senator Katie Britt (R-Alabama) led 16 of her Senate colleagues in introducing the Insurance Data Protection Act. This legislation would overrule a recent effort by the Federal Insurance Office (FIO) to step into the state-regulated insurance industry, including its proposed “Climate-Related Financial Risk Data Collection.”
Britt said that the bill would eliminate the FIO Director’s subpoena authority. For over a century, the insurance industry was regulated by the states. That changed somewhat when the FIO was created in the Dodd-Frank Wall Street Reform and Consumer Protection Act. That Obama-era legislation does include an explicit provision stating that the Office does not have general supervisory or regulatory authority over the insurance business, which is supervised and regulated on a state-by-state basis across the United States. Senator Britt’s legislation clarifies that FIO does not need subpoena power since it is intended to function as an informational body.
The bill would also require that the FIO coordinate any data collection efforts with state insurance regulators and assess all publicly available data and sources regarding the data being sought. These provisions would limit unnecessary data inquiries and prevent duplicative efforts across the state and federal landscapes.
The bill would also set forth confidentiality procedures and requirements governing how data can be used by financial regulators if collected from insurers. This would ensure consumers’ information remains secure.
“Our state insurance regulators have more than proven their ability to effectively and responsibly supervise the American insurance industry for over a century,” said Senator Britt. “FIO should work with, not around, state insurance officials. Not only is FIO overstepping its lawful authority and trampling on Congressional intent, but the office is also utilizing private insurance data to advance the Biden Administration’s leftwing Green New Deal agenda. This commonsense legislation would ensure the state-regulated insurance market remains strong, prevent redundant and unnecessary data reporting that would needlessly cost millions of dollars, and protect consumers’ sensitive information.”
This legislation has been cosponsored by Senate Banking Committee Ranking Member Tim Scott (R-South Carolina).
“As a former insurance agent, I know firsthand the importance of our state-based insurance regulation regime that has resulted in highly competitive and fair markets across the country – addressing local issues with local solutions,” said Sen. Scott. “That’s why I’ve been alarmed by the Federal Insurance Office’s (FIO) efforts to overstep its authority and push the Biden administration’s radical climate agenda. This important bill will reign in the administration’s climate activists, ensure greater coordination between FIO and state insurance regulators, and protect both consumers’ and insurers’ data.”
Senators Marsha Blackburn (R-Tennessee), John Boozman (R-Arkansas), Ted Budd (R-North Carolina), Tom Cotton (R-Arkansas), Kevin Cramer (R-North Dakota), Mike Crapo (R-Idaho), Steve Daines (R-Montana), Bill Hagerty (R-Tennessee), John Kennedy (R-Louisiana), Cynthia Lummis (R-Wyoming), Pete Ricketts (R-Nebraska), Mike Rounds (R-South Dakota), John Thune (R-South Dakota), Thom Tillis (R-North Carolina), and J.D. Vance (R-Ohio) have all signed on to cosponsor the legislation.
The National Association of Mutual Insurance Companies (NAMIC), American Property Casualty Insurance Association (APCIA), Association for Independent Agents (Big I), and Professional Insurance Agents (PIA) have endorsed this legislation.
FIO is an office within the Treasury Department created by Dodd-Frank to monitor the insurance sector and help provide information to policymakers and state regulators, as needed, without regulatory authority. The climate risk assessments the FIO is collecting were requested in the President’s climate executive order and would require over 200 private insurance companies (over 70% of the homeowners’ insurance market) to provide to FIO highly-detailed data (broken down by zip code) regarding the effect of climate-related catastrophes on insurance availability and affordability for Americans. On November 1st, the Treasury announced its intention to move ahead with this data call.
“Americans are facing growing challenges from extreme weather events caused by climate change,” Treasury Secretary Janet Yellen said in a statement about the FIO collection project. “The resulting data and analyses will help policymakers inform potential approaches to improving insurance availability and affordability for consumers.”
While federal officials continue pushing for more detailed climate data from insurers, the National Association of Insurance Commissioners (NAIC) emphasizes climate concerns during its annual fall meeting. The Climate and Resiliency Task Force is expected to adopt a National Climate Resilience Strategy for Insurance to stabilize the insurance market.
“It’s part of our overarching mission to manage risks, ensure the availability and reliability of insurance products, promote insurer solvency, and close protection gaps,” the strategy reads. “Our work to identify, assess, and communicate risk and risk reduction solutions, as well as to improve oversight of the insurance sector, has positioned state insurance regulators to implement a climate resilience strategy.”
Katie Britt is a member of the Senate Committee on Banking, Housing, and Urban Affairs.
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