HR4735-119

What This Bill Does

The Business of Insurance Regulatory Reform Act amends section 1027(f) of the Consumer Financial Protection Act. The bill says that when a person regulated by a state insurance regulator offers or provides a consumer financial product or service, the Consumer Financial Protection Bureau may not enforce the Consumer Financial Protection Act title against that person to the extent the person is engaged in the business of insurance. If the person is subject to an enumerated consumer law or a transferred authority under subtitle F or H, CFPB enforcement authority must be narrowly construed to the extent the person is engaged in insurance. The bill also adds a rule of construction requiring enforcement of the title to be broadly construed in favor of the authority of a state insurance regulator over a person regulated by that regulator. Its practical effect is to move insurance-business oversight away from CFPB and toward state insurance departments, while leaving CFPB authority more available when conduct is outside the business of insurance.

Who Benefits and How

Insurance carriers benefit from reduced CFPB enforcement exposure when the challenged activity is part of the business of insurance. State insurance regulators benefit because federal law would be construed broadly in favor of their authority over regulated insurance persons. Insurance agents and brokers benefit from clearer state-regulator primacy for insurance-business activities. Insurance trade associations benefit from a statutory argument against broad CFPB jurisdiction over insurance activities.

Who Bears the Burden and How

Consumer Financial Protection Bureau must narrow enforcement against state-regulated insurance persons engaged in the business of insurance. Consumers of insurance-linked financial products may have fewer CFPB enforcement routes for conduct treated as insurance business. State insurance departments must remain the primary enforcement venue for insurance-business conduct. Consumer advocates face a higher federal-jurisdiction barrier when seeking CFPB action against insurance actors.

Key Provisions

• Amends the Consumer Financial Protection Act section governing insurance-regulated persons.
• Limits CFPB enforcement where a state-regulated person is engaged in the business of insurance.
• Requires transferred-law or enumerated-consumer-law enforcement to be narrowly construed for insurance-business conduct.
• Provides a rule of construction favoring state insurance regulator authority.