Insurance Data Protection Act
- Sponsor
- Rep. Fitzgerald, Scott [R-WI-5]
- Committees
- Financial Services Committee (primary)
- Last action
- May 15, 2025
Bottom line
The bill aims to reduce regulatory burden on insurance companies and reinforce state primacy in insurance regulation by limiting federal financial regulators' direct data collection and enhancing data confidentiality.
What it actually does
This bill significantly restricts the ability of federal financial regulators, including the Federal Insurance Office (FIO) and the Office of Financial Research (OFR), to directly collect data from insurance companies. It repeals FIO's subpoena authority, exempts insurance companies from OFR's subpoena power, and mandates that other federal financial regulators must first attempt to obtain insurance data from existing federal or state sources before directly requesting it from insurers. The bill also strengthens confidentiality protections for any insurance data shared with federal regulators.
Proponents argue
Proponents argue that the bill reduces duplicative and burdensome data requests on insurance companies, respects the long-standing and effective state-based system of insurance regulation, and protects proprietary business information. They contend that federal agencies should leverage existing state regulatory data rather than creating parallel collection efforts, which can be costly and inefficient for insurers.
Opponents contend
Opponents contend that restricting federal financial regulators' direct data collection authority could create critical information gaps, hindering their ability to effectively monitor systemic risks posed by large, complex insurance groups. They argue that relying solely on state-provided data may lead to delays, inconsistencies, or insufficient granularity, potentially compromising federal efforts to maintain financial stability.
The bill text is short and relatively accessible, but a full understanding of its implications requires familiarity with existing federal financial regulations and the structure of insurance oversight.
Section 2
Repeal of Federal Insurance Office (FIO) Subpoena and Enforcement Authority
This section eliminates the Federal Insurance Office's statutory authority to issue subpoenas and compel testimony or the production of documents from insurance companies. This means the FIO can no longer directly demand data or information from insurers, significantly curtailing its independent data collection capabilities.
Supporters argue
Supporters argue that this repeal prevents federal overreach into the traditionally state-regulated insurance sector and eliminates duplicative data collection efforts, thereby reducing compliance costs for insurers.
Critics contend
Critics contend that removing FIO's direct data collection authority weakens its ability to monitor the insurance market, identify emerging risks, and fulfill its mandate to advise the Treasury Secretary on insurance matters, potentially creating blind spots for federal financial stability oversight.
Tradeoffs
This provision balances the desire to reduce federal regulatory burden on the insurance industry against the need for federal agencies to have direct access to data for systemic risk monitoring and market analysis.
Section 3
Enhanced Confidentiality for FIO Data and Restricted Sharing
This section amends existing FIO confidentiality rules. It explicitly states that sharing nonpublic data with the FIO does not waive any legal privilege. Crucially, it also restricts the FIO from sharing nonpublicly available data with other federal agencies, state insurance regulators, or other entities, unless specific conditions are met, further tightening data protection.
Section 4
Limitation on Office of Financial Research (OFR) Subpoena Authority for Insurance Companies
This section amends the Financial Stability Act of 2010 to specifically exclude insurance companies from the Office of Financial Research's (OFR) authority to subpoena data directly from financial companies. This means the OFR, like the FIO, would no longer be able to compel insurance companies to provide data directly.
Section 5, new Sec. 181(b) of the Financial Stability Act of 2010
Mandatory Advance Coordination for Data Collection from Insurance Companies by Financial Regulators
Before collecting any data from an insurance company, federal financial regulators (including the CFTC, FSOC, federal banking agencies, and OFR) must first coordinate with relevant federal agencies, state insurance regulators, or public sources to determine if the data is already available. If the data is available from these alternative sources, the regulator must obtain it from them. Direct collection from an insurance company is only permitted if the data is unavailable elsewhere and the collection complies with the Paperwork Reduction Act.
Section 5, new Sec. 181(c) of the Financial Stability Act of 2010
Broad Confidentiality Protections for Insurance Data Collected by Financial Regulators
This section establishes comprehensive confidentiality rules for any nonpublic insurance data collected by federal financial regulators. It ensures that sharing data does not waive any legal privilege, mandates that prior confidentiality agreements remain applicable, allows data to be shared with state insurance regulators through compliant information-sharing agreements, and applies Freedom of Information Act (FOIA) exceptions to such data. This aims to protect sensitive information from public disclosure and unauthorized sharing.
The bill's application to 'insurance companies' is defined by reference to section 201(a) of the Financial Stability Act of 2010. This external definition determines the precise scope of entities affected by the new data collection restrictions.
Section 4 and Section 5(a)(3)
Why it matters:This is standard legislative practice to avoid redundancy and ensure consistency with existing statutory definitions.
Case for: Supporters argue that referencing an existing definition ensures legal consistency and avoids potential conflicts or ambiguities that could arise from creating a new, potentially different definition.
Case against: Critics might argue that requiring external research for a fundamental definition makes the bill less self-contained and potentially harder for a casual reader or affected entity to fully comprehend without legal expertise.
Estimated impact: This reference defines the universe of insurance companies that will benefit from the reduced federal data collection authority, encompassing a broad range of life, property, and casualty insurers.
If a financial regulator determines that data is not available from other sources and decides to collect it directly from an insurance company, it must comply with the requirements of the Paperwork Reduction Act (PRA).
Section 5(b)(1)(B)(ii)
Why it matters:It's standard legislative practice to reference existing procedural laws rather than detailing them within the bill, assuming agencies are familiar with their obligations.
Case for: Proponents argue that requiring PRA compliance ensures that any direct data collection is subject to public review, minimizes unnecessary burden on the private sector, and justifies the need for new information collections by federal agencies.
Case against: Opponents might argue that imposing PRA requirements on data collection, especially in potentially urgent financial stability contexts, could introduce significant bureaucratic delays and hinder a federal regulator's ability to respond swiftly to emerging risks.
Estimated impact: This provision imposes a substantial procedural hurdle for federal financial regulators seeking to collect data directly from insurance companies, potentially increasing the time and resources required for such efforts.