Bill Summary
The "Business of Insurance Regulatory Reform Act of 2025" aims to clarify the authority of the Bureau of Consumer Financial Protection (CFPB) regarding entities that are regulated by state insurance regulators. Specifically, this legislation amends the Consumer Financial Protection Act of 2010 to establish that the CFPB cannot enforce its regulations on businesses engaged in the insurance industry when they are also regulated by state insurance authorities.
Key provisions include:
1. **Exceptions to Authority**: The CFPB's enforcement capabilities are limited when it comes to persons involved in the business of insurance, particularly when those entities are already under state insurance regulation.
2. **Narrow Construction of Enforcement**: The act emphasizes that if an insurance-regulated person is subject to consumer laws, the CFPB's authority to enforce those laws should be interpreted narrowly, respecting the primary role of state regulators.
3. **Support for State Regulators**: The legislation includes a rule of construction that favors the authority of state insurance regulators over the CFPB regarding insurance-related activities.
In essence, this bill seeks to reinforce the regulatory framework for insurance at the state level while delineating the limits of federal oversight by the CFPB in this sector.
Possible Impacts
The proposed "Business of Insurance Regulatory Reform Act of 2025" could have several implications for consumers and the insurance industry. Here are three potential effects:
1. **Reduced Consumer Protections**: By limiting the authority of the Bureau of Consumer Financial Protection (CFPB) over persons regulated by state insurance regulators, consumers may experience a decrease in regulatory oversight for certain financial products offered by insurance companies. This could potentially lead to less protection against unfair or deceptive practices, as state regulators might not be as robust or comprehensive in enforcing consumer protections compared to federal standards.
2. **Increased Complexity in Oversight**: The clarification of the CFPB's authority could create a more complex regulatory landscape for consumers to navigate. Individuals seeking financial products that overlap between insurance and financial services may find it difficult to understand which regulations apply to them, leading to confusion and potentially exposing them to risks associated with inadequate oversight.
3. **Impact on Insurance Pricing and Innovation**: Insurance companies may feel less burdened by federal regulations, potentially allowing for more innovation in product offerings. However, this could also lead to a competitive environment where companies prioritize profitability over consumer welfare. While this might lower prices in some cases, it could also result in products that are less favorable to consumers, especially if essential protections are weakened as a result of the regulatory changes.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2419 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2419
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 SENATE OF THE UNITED STATES
July 23, 2025
Mr. Scott of South Carolina (for himself, Mr. Rounds, Ms. Lummis, Mr.
Ricketts, and Mr. Moreno) introduced the following bill; which was read
twice and referred to the Committee on Banking, Housing, and Urban
Affairs
_______________________________________________________________________
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) in the paragraph heading, by striking
``Description of activities'' and inserting
``Exceptions'';
(B) by striking ``Paragraph (1)'' and inserting the
following:
``(A) Authority.--Paragraph (1)''; and
(C) by inserting after subparagraph (A), as so
designated, the following:
``(B) Limitation.--With respect to a person
regulated by a State insurance regulator--
``(i) if that person is offering or
providing a consumer financial product or
service, the Bureau may not enforce this title
with respect to that person to the extent that
the person is engaged in the business of
insurance; or
``(ii) if that 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 that
law with respect to that person shall be
narrowly construed to the extent that the
person is engaged in the business of
insurance.''; and
(2) by adding at the end the following:
``(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 the
State insurance regulator.''.
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