Former insurance commissioner and newly elected Montana Congressman Troy Downing introduced a bill in the US House of Representatives aimed at abolishing the Federal Insurance Office (FIO), according to a statement from his office.
Downing, a Republican representing Montana’s 2nd district, stated that regulation of the insurance industry should remain under state jurisdiction, not the federal government.
“FIO is a duplicative federal bureaucracy whose existence hinders the efforts of state regulators better equipped to address the insurance needs of their communities,” Downing said. “I was proud to call for FIO’s abolishment as Montana State Auditor, and I gladly do it now as a congressman and member of the House Financial Services Committee.”
As of January 24, the text of the bill was not available, according to Congress.gov, according to AM Best.
The proposed legislation has received strong support from the insurance industry. Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies (NAMIC), expressed concern that the FIO had surpassed its intended role as an informational resource for policymakers.
“FIO has become a tool for political agendas, overreaching and creating confusion and burdensome costs for consumers, often just to duplicate the work of state insurance regulators,” Grande said.
Several insurance commissioners from various states have also supported the move to eliminate the FIO. In November, North Carolina Insurance Commissioner Mike Causey renewed calls for its closure, citing the success of the state-based system established by the McCarran-Ferguson Act of 1945.
Causey’s call was soon supported by a coalition of insurance commissioners, who sent a letter to the newly formed Department of Government Efficiency urging the closure of the FIO. Commissioners from Alabama, Arkansas, Kansas, Louisiana, New Hampshire, North Carolina, Oklahoma, Tennessee, and West Virginia signed the letter. The group recommended that the department connect with Downing on this effort due to his extensive industry knowledge.
“State-based insurance regulation has successfully ensured consumer protection, market stability, and efficiency for decades,” said New Hampshire Insurance Commissioner DJ Bettencourt in a December statement. “The Federal Insurance Office has consistently failed to demonstrate its necessity, and its continued operation represents an unnecessary burden on taxpayers.”
North Dakota Insurance Commissioner Jon Godfread, president of the National Association of Insurance Commissioners, thanked Downing for introducing the legislation and noted that his team was reviewing the bill.
“I am working with my colleagues from across the country and the Trump administration to find the best path forward to keep insurance regulation and oversight where it belongs: with the states,” Godfread said in an emailed statement.