House Effort to Kill Federal Insurance Office Nears Vote

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.