On December 8, 2011 the House Financial Services Subcommittee on  Insurance, Housing and Community Opportunity approved legislation eliminating the Federal Insurance Office’s (“FIO”) and the Office of Financial Research’s (“OFR”) authority to subpoena information from insurance companies.  H.R. 3559 (the Insurance Data Protection Act), was introduced by Representative Steve Stivers (R-OH) and was approved by a party-line vote of 7-5, with each Republican on the Subcommittee voting in favor.

The legislation still needs to be approved by the House and Senate; however, the Subcommittee’s approval is perceived as a step in the right direction by those in the insurance industry who have expressed concern over encroaching federal regulation, typically reserved for the states.  See our previous article discussing such concern in more detail: Federal Regulation of Insurance: Treading Carefully, by clicking here.  Despite these concerns, or in light of them, the FIO continues to reaffirm its deference to state regulation.  See our blog on this topic by clicking here. In a statement from Charles Symington, senior vice president of government affairs at the Independent Insurance Agents & Brokers of America (“IIABA”), which summarizes the majority sentiment of insurers and state regulators:  “Very simply, the Federal Insurance Office was principally created to be an informational office, and the information that they need is already collected and readily available through state insurance regulators,” says Symington. “It is important to [IIABA] that both the FIO and OFR have no more authority than they absolutely need to complete their very limited Congressionally-mandated duties, and we thank the Committee for their action today in this regard.”

To see a markup of the legislation, click here.