HB7130, titled the McCarran-Ferguson Restoration Act, would eliminate the Department of the Treasury’s Federal Insurance Office and replace it with a new United States Insurance Representative housed within Treasury. The new office would be responsible for coordinating federal policy on international insurance matters, representing Treasury in international insurance supervisory bodies, assisting with negotiations of covered agreements, advising on prudential international insurance issues, and helping administer the federal terrorism insurance program.
The bill also restructures how federal law interacts with state insurance regulation. It gives the United States Insurance Representative authority to determine when a state insurance measure is preempted by a covered international agreement, but only after notice, consultation, public comment, and a waiting period. At the same time, the bill expressly preserves broad areas of state authority, including state control over rates, premiums, underwriting, sales practices, coverage requirements, antitrust enforcement, and most capital and solvency rules, except where foreign insurers are treated less favorably than U.S. insurers.
In addition to replacing the Federal Insurance Office, the bill amends several provisions of the Dodd-Frank Act and related statutes to remove references to the old office and substitute the new representative. It also changes the membership of the Financial Stability Oversight Council by adding a presidentially appointed state insurance commissioner and revising related appointment and service rules. The bill would therefore affect Treasury, the Financial Stability Oversight Council, state insurance regulators, insurers and reinsurers, and parties involved in international insurance agreements.
The general sentiment reflected by the bill text is pro-state-regulatory and pro-industry, especially for U.S. insurers, with an emphasis on restoring state primacy in insurance regulation while preserving a federal role in international negotiations. Because there are no committee transcripts or recorded votes provided, there is no documented debate or recorded support/opposition in the available materials. The structure of the bill suggests its sponsors view the Federal Insurance Office as unnecessary or overly federalizing, while still keeping a limited federal mechanism for international insurance coordination.
The main point of contention likely concerns federal versus state authority over insurance regulation, particularly whether the new preemption process could still allow federal override of state rules to satisfy international agreements. Another likely issue is the bill’s treatment of foreign insurers versus domestic insurers, since preemption is tied to avoiding less favorable treatment of non-U.S. insurers. The addition of a state insurance commissioner to FSOC may also raise questions about representation, appointment power, and the balance of influence among federal and state regulators.
The bill would repeal the Federal Insurance Office and create a new United States Insurance Representative within Treasury, requiring conforming amendments across the Dodd-Frank Act and related laws. It would shift federal insurance coordination, international negotiation, and covered-agreement preemption functions to the new representative, while preserving Treasury’s broader authority over insurance matters and maintaining significant state regulatory powers over insurance markets.
The bill appears generally favorable to state insurance regulation and to a limited federal role focused on international prudential issues. No committee discussion or votes are provided, so there is no recorded legislative sentiment beyond the bill’s text and sponsor framing. The measure’s title and structure indicate support for restoring or strengthening the McCarran-Ferguson framework, while still allowing federal action where international agreements require it.
The central controversy is the balance between state insurance regulation and federal authority to preempt state measures under covered international agreements. Supporters are likely to favor eliminating the Federal Insurance Office and reinforcing state primacy, while critics may worry that the new representative still centralizes enough authority to override state law. Additional contention may involve the bill’s international insurance policy role, the scope of preemption, and the addition of a state insurance commissioner to the Financial Stability Oversight Council.