The American Bankers Insurance Association and several other trade associations yesterday wrote to Rep. Jeb Hensarling (R-Texas), encouraging him to include language in his Financial Choice Act that would clarify an exemption provided in the Dodd-Frank Act for state-regulated insurance products. The exemption was intended to prevent the Consumer Financial Protection Bureau from directly overseeing “any person regulated by a state insurance regulator that is engaged in the business of insurance,” the groups said.
The associations pointed out that there are already robust state laws in place to govern insurance products and ensure consumer protection and that insurance commissioners are effectively overseeing insurers within each state. They expressed concerns that the CFPB has overstepped its regulatory bounds through various enforcement actions targeting state-regulated insurance products, such as extended auto warranties and GAP insurance. The groups urged Congress to strengthen the language around the exemption to protect the state role in oversight of the insurance industry.