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PCI Praises Bipartisan Duffy-Heck FIO Reform Bill

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October 03, 2017

The Federal Insurance Office (FIO) Reform Act of 2017 was recently introduced by Congressman Sean Duffy, a Wisconsin Republican and chairman of the House Financial Services Subcommittee, and Congressman Denny Heck, a Washington Democrat. If enacted, the bill would do the following.

  • Move the FIO to the Office of International Affairs within the US Treasury Department.

  • Limit the FIO's role largely to international matters and provide that the office speaks for the Treasury Department, but not other federal agencies, in international discussions.

  • Authorize the FIO to coordinate federal insurance policy, and require the office to achieve consensus with the states before advocating or agreeing to positions in international forums, such as the International Association of Insurance Supervisors.

  • Eliminate the FIO's authority relating to purely domestic issues, including the authority to (1) engage in broad information gathering authority and reporting obligations and (2) issue subpoenas.

  • Retain the FIO's existing authority to "monitor all aspects of the insurance industry" and advise the Treasury secretary on the administration of the Terrorism Risk Insurance Program.

  • Continue the authority of the Treasury Department and the United States Trade Representative to negotiate and enter into covered agreements, but the secretary, not the FIO director, would have the authority to determine whether a covered agreement preempts state law. It would also provide that a covered agreement may not include new prudential requirements for US insurers.

  • Limit the number of FIO employees to five, recognizing the much more limited federal coordination and international role set forth for the office and that the states already have more than 10,000 regulators adequately overseeing the industry domestically.

Nat Wienecke, senior vice president for federal government relations at the Property Casualty Insurers Association of America (PCI), praised the measure, saying, "This bipartisan legislation will reduce FIO's domestic footprint, eliminate its quasi-regulatory authority, and refocus the FIO on international matters, where it can play an appropriate role in coordinating with the states to develop consensus on US international insurance policy. The bill also limits the bureaucracy from expanding beyond its core mission."

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