U.S. Senator Katie Britt Leads Legislation to Prevent Federal Overreach into State-Regulated Insurance Industry

WASHINGTON, D.C., November 28, 2023 – U.S. Senator Katie Britt (R-Ala.), a member of the Senate Committee on Banking, Housing, and Urban Affairs, today led 16 of her Senate colleagues in introducing the Insurance Data Protection Act. This legislation would correct the Federal Insurance Office’s (FIO) recent efforts to overstep into the state-regulated insurance industry, including its proposed “Climate-Related Financial Risk Data Collection.”  

The bill would eliminate the FIO Director’s subpoena authority. FIO was created in the Dodd-Frank Wall Street Reform and Consumer Protection Act with an explicit provision stating that the Office does not have general supervisory or regulatory authority over the business of insurance, 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.

Additionally, the bill would require FIO to coordinate any data collection efforts with state insurance regulators and to 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.

Finally, the bill sets forth confidentiality procedures and requirements governing the manner in which 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.”

Cosponsors of this legislation include Senate Banking Committee Ranking Member Tim Scott (R-S.C.) and U.S. Senators Marsha Blackburn (R-Tenn.), John Boozman (R-Ark.), Ted Budd (R-N.C.), Tom Cotton (R-Ark.), Kevin Cramer (R-N.Dak.), Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Bill Hagerty (R-Tenn.), John Kennedy (R-La.), Cynthia Lummis (R-Wyo.), Pete Ricketts (R-Nebr.), Mike Rounds (R-S.Dak.), John Thune (R-S.Dak.), Thom Tillis (R-N.C.), and J.D. Vance (R-Ohio).

“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. 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,” Ranking Member Scott said.

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.

The text of the bill can be viewed here.

Background:

• FIO is an office within the Treasury Department created in Dodd Frank to monitor the insurance sector and help provide information to policymakers and state regulators, as needed, without regulatory authority.
• The insurance industry has been effectively regulated at the state – not federal – level for over a century.
• Despite being created to serve solely as an informational body in support of state regulators, the Biden Administration has pressured FIO to overstep into the state-regulated insurance industry, including by issuing a “Climate-Related Financial Risk Data Collection” in Oct. 2022.
• This was 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 1^st, Treasury announced its intention to move ahead with this data call.
• The data call is costly, onerous and duplicative as insurance carriers already report statewide data to their state regulators.
• FIO provided no information in its proposal as to how the data provided would be kept secure or with whom it would be shared.
• FIO also demonstrated no intention of coordinating these efforts with the NAIC and state regulators, which is required under Title V of Dodd Frank.

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