Amid calls from some state insurance regulators to eliminate the Federal Insurance Office, a leading Republican member of congress said there is a case to preserve the agency, but only if it refocuses its priorities.
Rep. Mike Flood (R-Neb.), chair of the House Financial Services Subcommittee on Housing and Insurance, criticized Federal Insurance Office's (FIO) use of subpoenas and data collection efforts in an interview with S&P Global Market Intelligence.
According to Flood, the agency should instead focus on its intended role to advocate against European regulations. Flood said these regulations could regulate insurers "right out of business," something he feels has already happened to many community banks.
"When the states are doing so well ... why are we messing with it?" Flood said. "The idea that FIO is in there trying to scramble everyone's eggs ... it's like what the heck, stop it."
Legislative efforts
The federal insurance regulator's call for data in response to a climate-related executive order from former President Joe Biden drew criticism from the National Association of Insurance Commissioners, state insurance regulators and the insurance industry.
The order instructed FIO to assess "climate-related issues or gaps in the supervision and regulation of insurers" and examine the prospects of "major disruptions" to private insurance coverage in parts of the US that are particularly vulnerable to the impacts of climate change.
"They aren't the environmental police, making sure that insurance companies are on board with all the different [environmental, social and governance] things that the previous administration was interested in," Flood said. "But there is a role for [FIO] to work really in an international basis and to protect our good system of insurance in the United States."
In December 2024, nine insurance commissioners — from Alabama, Arkansas, Kansas, Louisiana, New Hampshire, North Carolina, Oklahoma, Tennessee and West Virginia — sent a letter to technology billionaire Elon Musk, the Department of Government Efficiency initiative and other members of Congress, urging them to abolish the FIO.
The FIO was established within the US Treasury Department as part of the Dodd-Frank Act in 2010. According to its website, the FIO is tasked with monitoring the insurance industry for potential "issues or gaps in the regulation of insurers" that may create a "systemic crisis" in the insurance industry or the US financial system.
Since taking office, the second Trump administration has overseen significant staffing cuts at a variety of government agencies. The Consumer Financial Protection Bureau, an agency that has long faced criticism from Republicans and was also created as part of Dodd-Frank, is reportedly being targeted for elimination.
North Carolina Insurance Commissioner Mike Causey previously told Market Intelligence that there were many within the National Association of Insurance Commissioners who supported the elimination of the FIO.
Meanwhile, Flood said his position on FIO is that the agency should be focused on being a representative to counterparts in the EU, a role that he said the federal government had initially chartered the agency to fill.
"We should use this FIO office to be communicating and fighting back against some of the overly burdensome regulations and rulemaking in Europe where they've essentially dissolved their ability to have a robust life insurance market," Flood said. "It would be a shame to get rid of the office if they're not doing the one thing that we would want them to do, and that's our job as Congress to get that changed."
House Republicans put forward several bills to restrict the FIO's operations in the past. Rep. Scott Fitzgerald (R-Wis.) introduced legislation in September 2023 that would strip the agency of its subpoena authority and limit the way it can collect data.
Rep. Ben Cline (R-Va.) also led previous efforts to abolish the FIO, including introducing legislation in 2023 to eliminate the agency. The bill was not taken up on the floor of the House.
Meanwhile, Rep. Troy Downing (R-Mont.), who was newly elected to Congress and previously served as Montana's state auditor — a de facto insurance commissioner role — put his own bill forward at the start of this year to eliminate the FIO.
Efforts to eliminate the regulator also occurred during President Donald Trump's first term. In 2017, the National Association of Mutual Insurance Companies called for legislators to abolish the FIO, describing the office as unnecessary.
The FIO is authorized to monitor the access that underserved communities and consumers have to "affordable non-health insurance products," according to the agency's website. It also assists the Treasury secretary in administering the federally backed Terrorism Risk Insurance Program, among other duties.
Subcommittee priorities
Flood said that besides dealing with member frustration over the FIO's operations, he also plans to prioritize housing affordability as chair of the subcommittee.
Similarly, Flood plans to address the National Flood Insurance Program, which he said is in need of reform. Flood is against creating a federal disaster insurance pool, insisting that the US is "not in a position where we can be spending more money."
Flood also mentioned that the insurance industry is interested in a federal solution on privacy policy, something he hopes to tackle during his leadership tenure. Fraud is also a concern.
Flood said that ultimately, deregulation is a key focus for his committee, the Treasury secretary and banking leaders.
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