Proposed Federal Insurance Regulation

Executive (EX) Committee
Government Relations Leadership Council

Unlike banking and securities products, which are about access to credit and risk taking, insurance is a legal promise—a guarantee—to pay benefits if and when a certain event occurs. Insurance products are rooted in the separate contract, tort, and social policy laws of each state where they are sold and require a more accountable, accessible type of protection that states can best provide. Congress endorsed state oversight of insurance in 1945 with the McCarran-Ferguson Act and specifically recognized and reaffirmed the benefits of the state system in 1999 when it modernized federal financial supervision laws in the Gramm-Leach-Bliley Act (GLBA). Since then, however, insurance industry Washington lobbyists have pushed for a federal insurance charter and a new regulatory regime in Washington that would diminish or supplant successful and effective state-based consumer protections.