Federal Insurance Office Elimination Act
- Sponsor
- Rep. Downing, Troy [R-MT-2]
- Committees
- Financial Services Committee (primary)
- Last action
- Jan 23, 2025
Bottom line
The bill dismantles the Federal Insurance Office, shifting federal oversight of the insurance industry back towards a more decentralized, state-centric approach.
What it actually does
This bill eliminates the Federal Insurance Office (FIO) within the Department of the Treasury, along with the position of its Director. It also removes all statutory references to the FIO from existing laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act, ensuring its functions are fully dismantled.
Proponents argue
Supporters argue that the Federal Insurance Office is an unnecessary and redundant federal bureaucracy that overreaches into an industry traditionally and effectively regulated at the state level. Eliminating the FIO would reduce federal spending, streamline regulatory processes, and prevent federal interference in state insurance markets, thereby fostering innovation and efficiency.
Opponents contend
Critics contend that the FIO plays a vital role in monitoring the insurance industry for systemic risks, coordinating federal policy on insurance, and representing the U.S. in international insurance regulatory discussions. Its elimination could create significant regulatory gaps, weaken the federal government's ability to identify and mitigate financial stability threats from the insurance sector, and diminish U.S. influence on global insurance standards.
The bill is very short and clear, making it highly accessible for any reader to understand its core purpose quickly.
Section 2(a)
Elimination of Federal Insurance Office and Director Position
This provision directly abolishes the Federal Insurance Office (FIO) within the Department of the Treasury and terminates the position of its Director. This means the federal entity responsible for monitoring the insurance sector, advising the Treasury Secretary, and representing the U.S. internationally on insurance matters would cease to exist.
Supporters argue
Proponents argue that eliminating the FIO reduces unnecessary federal bureaucracy and spending, returning oversight to state regulators who are better positioned to understand and respond to local market conditions. They believe the FIO's functions are either redundant or an overreach of federal authority.
Critics contend
Opponents argue that the FIO provides crucial federal expertise and coordination for an industry with national and international implications. Its elimination would remove a key federal voice in insurance policy and risk monitoring, potentially leaving gaps in oversight.
Tradeoffs
The provision balances the desire for reduced federal footprint and state autonomy against the perceived need for federal oversight in a globally interconnected financial sector.
Section 2(b)
Amendment to Title 31, United States Code
This section formally removes the statutory basis for the Federal Insurance Office by striking Section 313 from Title 31 of the United States Code. This ensures that the FIO cannot be re-established without new legislation, solidifying its elimination from federal law.
Section 3(a)
Amendments to Dodd-Frank Wall Street Reform and Consumer Protection Act
This provision systematically removes all references to the Federal Insurance Office from various sections of the Dodd-Frank Act. This includes removing the FIO Director from the Financial Stability Oversight Council (FSOC) membership, eliminating FIO's role in data collection, and removing its involvement in resolution authority for financial institutions. This ensures that the FIO's functions and responsibilities under Dodd-Frank are entirely dissolved.
Section 3(b)
Amendments to Economic Growth, Regulatory Relief, and Consumer Protection Act
This provision amends the Economic Growth, Regulatory Relief, and Consumer Protection Act to remove references to the Director of the Federal Insurance Office concerning international insurance capital standards. This means that the Secretary of the Treasury and the Board of Governors of the Federal Reserve System would be the sole federal entities responsible for negotiating and coordinating with international partners on these standards, without FIO input.