NAMIC Lauds Introduction of Legislation to Rein In Federal Insurance Office

The National Association of Mutual Insurance Companies welcomed today’s introduction of the Insurance Data Protection Act in the U.S. House of Representatives to protect insurers and the state-based system of insurance from federal overreach.

Led by Rep. Scott Fitzgerald, R-Wis., with two original co-sponsors, the bill would remove the Federal Insurance Office’s subpoena authority. FIO was created under the Dodd-Frank Act to monitor insurance markets and provide information to federal policymakers. It was also made very clear the office is not a regulator. Yet in October 2022, FIO issued its proposed climate data call from hundreds of property/casualty insurers despite being mandated to make use of publicly available information whenever possible and work with state regulators if additional information was needed, with subpoena powers to remain the last resort.

“The last resort should never become the first option, but it seems like that’s the route FIO is taking,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “FIO was created with the explicit provision that it is not a regulator, not an enforcement agency, and not an investigator. The office never should have been given subpoena authority, as these duplicative and unnecessary efforts end up costing consumers; removing this authority should help FIO stay within the boundaries it was given.

Although state regulators, individually and collectively through the National Association of Insurance Commissioners, have been gathering data for years, FIO intends to proceed with its data call in the coming months. FIO claims it needs data on a different, more detailed scale on an annual basis to gauge the potential risk of climate change to the industry. In the past year, FIO has drawn criticism from insurers and regulators for a data call that ignores statutory guidance and the more than a decade of climate work by the state regulators.

At a time when American consumers and businesses continue to struggle financially, FIO also estimates the cost to the industry of providing this data is $4 million each year. The office provided no information in its proposal as to how the data provided would be kept secure or with whom it would be shared.

“There’s no possible reason for FIO to need entirely separate data, other than simply wanting to assert an authority it should never have had or for purposes not stated,” Grande said. “We strongly urge Congress to respect the state regulatory system and pass the Insurance Data Protection Act to prevent further encroachment by the Federal Insurance Office.”

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NAMIC membership reflects many of the country’s largest national insurers as well as regional and local mutual insurance companies on main streets across America. NAMIC members write $391 billion in annual premiums and account for 68 percent of homeowners, 56 percent of the automobile, and 31 percent of the business insurance markets.