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Inside of the Rotunda at the U.S. Capitol in Washington, D.C. September 20, 2013. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

Life Health > Life Insurance

House Effort to Kill Federal Insurance Office Nears Vote

By Allison Bell

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A major U.S. House spending bill includes provisions that could shut down an office that helps the U.S. Treasury Department monitor the insurance industry.

Members of the House Rules Committee voted 9-3 Monday to approve the rule that would shape House floor debate on the bill, H.R. 4664.

The introduction to Title I appropriates $248.1 million for Treasury Department operations, “provided that none of the funds under this heading may be used to support the activities of the Federal Insurance Office,” according to the bill text.

House Republican leadership supports the bill. The administration of President Joe Biden says the president would veto the current version.

What it means:  If H.R. 4664 passes as written, the federal government may be less involved with regulation of your clients’ life insurance policies and annuity contracts.

The Federal Insurance Office: In the United States, regulation of the business of insurance is in the hands of the states.

Congress created the FIO in the hope of increasing the Treasury Department’s ability to understand the insurance industry and manage the kinds of problems that led to the 2007-2009 Great Recession.

Congress also wanted the FIO to give the United States a national representative it could send out to international insurance standards negotiations.

The current FIO director is Steven Seitz.

H.R. 4664: Much of the 218-page bill appropriates funding for agencies such as the Federal Trade Commission, the U.S. Securities and Exchange Commission and the Internal Revenue Service. The bill also blocks the SEC from moving forward on several rules House Republicans don’t like.

Opposition to the FIO: Rep. Ben Cline, R-Va., has been one of the leaders of congressional efforts to shut down the Federal Insurance Office.

He introduced one version of the Federal Insurance Office Elimination Act in 2021, and he brought the bill back, as H.R. 2933, earlier this year.

When Cline reintroduced the bill, he cited the Biden administration’s efforts to have the FIO assess whether climate change could affect insurers’ financial stability as an example of the FIO’s overreach.

The National Association of Professional Insurance Agents backs Cline’s bill.

The U.S. Capitol dome. Photo: Diego M. Radzinschi/ALM

Allison Bell

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