House Financial Services Committee to Vote on Bill Clarifying CFPB’s Ability to Regulate Insurance

January 11, 2018

The House Financial Services Committee will vote next week on a bill that would clarify and reinforce the Consumer Financial Protection Bureau’s ability to regulate the insurance industry.

The Business of Insurance Regulatory Reform Act of 2017 (3746)—introduced by U.S. Reps. Sean Duffy (R-Wis.) and Gwen Moore (D-Wis.)—would amend the Consumer Financial Protection Act of 2010 to clarify the authority of the Consumer Financial Protection Bureau (CFPB) with respect to entities regulated by a state insurance regulator, and for other purposes.

The bipartisan bill says that if a person engaged in the business of insurance is regulated by a state insurance regulator but otherwise subject to the Consumer Financial Protection Act of 2010, the CFPB must construe its authority narrowly.

ALTA joined seven other insurance trade groups urging support for the bill. In a statement for the record to the U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit, the groups said that Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act explicitly exempted the business of insurance from the purview of the CFPB except to the extent the “enumerated consumer laws”

“Essentially, Dodd-Frank reiterated that the regulation of insurance had been delegated to the states under the McCarran-Ferguson Act,” the letter said. “Unfortunately, the Bureau has demonstrated its willingness to ‘tip toe’ into insurance regulation and explore the extent of its powers in an open-ended and sometimes confusing manner.”

“The bureau should only exercise regulatory jurisdiction over the business of insurance where it has clear authority from Congress and that deference should be given to state insurance regulators when it comes to the business of insurance,” the letter continued. “When considering regulatory reform at the bureau, avoiding the kind of duplication which would be created in regulating insurance must be at the top of the priority list.”

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