Federal Insurance Office Abolishment Act of 2026
- Sponsor
- Sen. Cruz, Ted [R-TX]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jul 29, 2026
Bottom line
This bill seeks to streamline federal oversight of the insurance sector by removing a specific office established after the 2008 financial crisis, transferring any residual federal insurance authority back to the Treasury Secretary.
What it actually does
This bill, the "Federal Insurance Office Abolishment Act of 2026," eliminates the Federal Insurance Office (FIO) within the Department of the Treasury and the position of its Director. It also makes conforming amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act, removing all references to the FIO from these statutes. The bill explicitly clarifies that the Secretary of the Treasury's general authority over insurance matters is not affected.
Proponents argue
Proponents argue that the FIO has largely duplicated efforts of state insurance regulators, lacked clear authority, and imposed unnecessary burdens without providing significant benefits to the insurance market or consumers. Abolishing it would reduce federal bureaucracy, save taxpayer money, and restore primary regulatory authority to the states, which are traditionally responsible for insurance oversight. They contend that the FIO's functions can be adequately handled by other federal agencies or the Treasury Secretary directly, without a dedicated office.
Opponents contend
Opponents would likely argue that the FIO plays a crucial role in monitoring the insurance industry for systemic risks, coordinating with international regulators, and advising the Treasury on insurance matters, especially in a globalized financial system. They might contend that its abolishment would create a regulatory gap, diminish the federal government's ability to respond to future financial crises involving insurance, and weaken consumer protections by reducing federal oversight and data collection capabilities.
The bill text is very short and straightforward, making it highly accessible for a reader to understand its direct legislative intent.
Section 2(a) and (b)
Abolishment of the Federal Insurance Office and Director Position
This section directly eliminates the Federal Insurance Office (FIO) within the Department of the Treasury and also abolishes the specific position of the Director of the FIO. It further amends Title 31 of the U.S. Code by striking the section that established the FIO, effectively removing it from federal law.
Supporters argue
Supporters argue that abolishing the FIO will reduce unnecessary federal bureaucracy and save taxpayer money by eliminating an office whose functions are either redundant with state regulators or can be absorbed by other parts of the Treasury Department.
Critics contend
Opponents would contend that eliminating the FIO removes a dedicated federal voice and expertise on insurance matters, potentially weakening the federal government's ability to monitor and respond to systemic risks in the insurance sector.
Tradeoffs
The tension lies between reducing federal overhead and potentially losing specialized federal expertise and coordination capabilities regarding the insurance industry.
Section 2(c)
Preservation of Secretary of the Treasury's Insurance Authority
This subsection explicitly states that the abolishment of the FIO and the related statutory amendments should not be interpreted as repealing or limiting any existing authority of the Secretary of the Treasury concerning insurance matters. This ensures that the Treasury Department retains its general oversight and policy-making capacity regarding insurance, even without a dedicated FIO.
Section 3(a)
Conforming Amendments to Dodd-Frank Act
This section systematically amends various parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It strikes references to the Federal Insurance Office from sections related to the Financial Stability Oversight Council (FSOC) and the orderly liquidation authority, effectively removing the FIO from its previous roles in financial stability oversight and resolution planning. For example, it removes the FIO Director from FSOC membership and from consultation requirements for certain financial actions.
Section 3(b)
Conforming Amendments to Economic Growth, Regulatory Relief, and Consumer Protection Act
This section amends the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) by removing references to the Director of the Federal Insurance Office from provisions related to international insurance capital standards. Specifically, it changes the entities involved in discussions and negotiations regarding covered agreements and prudential standards, shifting responsibilities from the FIO Director to the Secretary of the Treasury and the Board of Governors of the Federal Reserve System.
These sections make numerous technical amendments to the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act, specifically striking out all references to the Federal Insurance Office and its Director. This includes removing the FIO Director from the Financial Stability Oversight Council (FSOC) and from various consultation and negotiation processes related to financial stability and international insurance standards.
Section 3(a) and 3(b)
Why it matters:This is standard legislative practice for conforming amendments when an office or entity is abolished. It ensures all related statutes are updated consistently.
Case for: Supporters argue these technical amendments are essential for legal clarity and consistency, ensuring that the FIO's abolishment is fully reflected across all relevant federal financial statutes.
Case against: Critics might argue that the cumulative effect of these removals could subtly shift the balance of power or reduce specialized insurance expertise in critical federal bodies, which might not be immediately apparent without a deep dive into the statutory language.
Estimated impact: These amendments collectively remove the FIO's formal participation and consultation roles in federal financial stability oversight and international insurance policy, centralizing these functions more directly under the Treasury Secretary and Federal Reserve.