Bill Summary
The "Business of Insurance Regulatory Reform Act of 2025" aims to amend the Consumer Financial Protection Act of 2010 to clarify the authority of the Bureau of Consumer Financial Protection (CFPB) in relation to entities regulated by state insurance regulators.
Key provisions include:
1. **Authority Limitation**: The CFPB's enforcement authority over consumer financial products or services is limited for businesses engaged in the insurance industry. Specifically, if a company is primarily operating in the insurance sector, the CFPB cannot enforce certain consumer financial regulations against it.
2. **Narrow Construction of Authority**: When it comes to enforcing consumer laws against such entities, the CFPB's authority is to be interpreted narrowly, meaning that the Bureau's ability to regulate these companies will be restricted.
3. **Support for State Regulators**: The Act emphasizes that the enforcement of these regulations should be interpreted in a way that supports state insurance regulators, ensuring that they retain primary oversight over these companies.
Overall, this legislation is designed to clarify the division of regulatory responsibilities between state insurance regulators and the CFPB, thereby reinforcing state authority in regulating the insurance market.
Possible Impacts
Here are three examples of how the "Business of Insurance Regulatory Reform Act of 2025" could affect people:
1. **Consumer Protection Limitations**: With the Bureau of Consumer Financial Protection's authority limited regarding entities regulated by state insurance regulators, consumers may find less oversight and protection when dealing with insurance products. If a consumer encounters issues with insurance-related financial products, they might have fewer avenues for recourse or enforcement of consumer protections that the Bureau typically provides, potentially leading to less favorable outcomes for consumers in disputes.
2. **Increased Regulation Variability**: The amendment may lead to discrepancies in regulation between federal and state levels. Consumers purchasing insurance products might experience variations in the protections available depending on their state. This could create confusion among consumers about their rights and what protections apply to them, especially if they move between states or engage with national insurance providers.
3. **Impact on Insurance Industry Practices**: Insurance companies might find it easier to operate without the oversight of the Bureau when engaging in the business of insurance, potentially leading to practices that prioritize profitability over consumer welfare. This could result in higher premiums or less comprehensive coverage options for consumers, as insurers might be incentivized to reduce costs and regulatory compliance efforts at the expense of consumer-friendly practices.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4735 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4735
To amend the Consumer Financial Protection Act of 2010 to clarify the
authority of the Bureau of Consumer Financial Protection with respect
to persons regulated by a State insurance regulator, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 23, 2025
Mr. Steil (for himself, Mr. Barr, Mr. Meuser, Mr. Huizenga, Mr.
Fitzgerald, and Mr. Nunn of Iowa) introduced the following bill; which
was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Consumer Financial Protection Act of 2010 to clarify the
authority of the Bureau of Consumer Financial Protection with respect
to persons regulated by a State insurance regulator, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Business of Insurance Regulatory
Reform Act of 2025''.
SEC. 2. CLARIFICATION TO THE AUTHORITY OF THE BUREAU WITH RESPECT TO
PERSONS REGULATED BY A STATE INSURANCE REGULATOR.
Section 1027(f) of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5517(f)) is amended--
(1) in paragraph (2)--
(A) by striking ``Description of activities.--
Paragraph (1)'' and inserting: ``Exceptions.--
``(A) Authority.--Paragraph (1)''; and
(B) by inserting after subparagraph (A) (as added
by this Act) the following new subparagraph:
``(B) Limitation.--With respect to a person
regulated by a State insurance regulator--
``(i) and if such person is offering or
providing a consumer financial product or
service, the Bureau may not enforce this title
with respect to such person to the extent such
person is engaged in the business of insurance;
or
``(ii) and if such person is subject to any
enumerated consumer law or any law for which
authorities are transferred under subtitle F or
H, the authority of the Bureau to enforce such
law with respect to such person shall be
narrowly construed to the extent such person is
engaged in the business of insurance.''; and
(2) by adding at the end the following new paragraph:
``(4) Rule of construction.--The enforcement of this title
shall be broadly construed in favor of the authority of a State
insurance regulator with respect to a person regulated by a
State insurance regulator.''.
<all>