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Rep. Troy Downing urges elimination of Federal Insurance Office, cites state authority concerns
Summary
Rep. Troy Downing told the House Financial Services Committee that he has introduced legislation to abolish the Federal Insurance Office (FIO), arguing that state-based regulation and the McCarran-Ferguson Act should govern insurance oversight and that FIO has overstepped by pursuing climate-related data calls and not consulting state regulators.
Representative Troy Downing told the House Financial Services Committee during a member-day hearing that he has introduced legislation to eliminate the Federal Insurance Office and return most insurance oversight responsibilities to state regulators.
Downing, a member of the committee and a former state insurance and securities regulator, said he introduced H.R. 643, the Federal Insurance Office Elimination Act, to “preserve state based regulation because states are best equipped to address the insurance needs of their communities, not the federal government.”
Downing framed his proposal around the McCarran-Ferguson Act of 1945, which he said gives states primary authority over insurance regulation, and criticized the Dodd-Frank Act of 2010 for creating FIO. He told the committee that, in his view, FIO has in some cases “weaponized” its authorities by issuing data calls to domestic insurers on climate-related topics and by not sufficiently consulting state insurance commissioners.
Downing said some narrow international functions that FIO now performs — including representing the United States in international insurance fora and FIO’s seat on the Financial Stability Oversight Council (FSOC) — could be preserved by an appointee at the Treasury Department. “I believe that that could be an appointee under treasury,” he said, adding that such an appointee could also take FIO’s FSOC seat.
He reiterated objections to FIO’s investigative tools, saying he does not believe the office should have subpoena power over insurance companies. Downing said his bill enjoys support among industry stakeholders and that he intends to work with the committee and state regulators to transition necessary international and coordination functions to other federal offices if FIO is eliminated.
The committee’s chair asked Downing how international representation would be handled if FIO were eliminated; Downing replied that a Treasury appointee could fill that role and represent insurers with international exposure. The chair and other members pressed him on whether eliminating FIO would leave states without voice at FSOC; Downing said the Treasury appointee could address that concern.
Ending note: Downing said he looks forward to working with insurance stakeholders and committee leadership to advance the legislation and to preserve state-based oversight functions while ensuring continued U.S. representation on international insurance matters.
