In a significant move, insurance commissioners from nine states are turning to the new Department of Government Efficiency (DOGE) to advocate for the elimination of the Federal Insurance Office (FIO). Their stance is based on the belief that the FIO’s mission of monitoring the insurance industry is already effectively fulfilled by state regulators.
The letter, addressed to DOGE heads Elon Musk and Vivek Ramaswamy, pointed out that FIO has been marred by a reputation of ineffectiveness and dishonesty in its dealings with the states since its inception. Insurance commissioners David J. Bettencourt of New Hampshire, Glen Mulready of Oklahoma, Carter Lawrence of Tennessee, Mark Fowler of Alabama, Tim Temple of Louisiana, Vicki Schmidt of Kansas, Alan McClain of Arkansas, Mike Causey of North Carolina, and Allan McVey of West Virginia further emphasized that any functions the FIO purports to serve could easily be absorbed by other federal offices or reverted to the states.
The commissioners used the FIO’s latest “misguided effort” to collect data from insurers in collaboration with the NAIC as an example of its alleged ineffectiveness. They questioned the motivation behind the data call, specifically whether the Treasury Department’s FIO intended to use the data for consumer protection or to pressure the insurance industry into adopting ESG (environmental social and governance) policies.
The history of the FIO’s data collection efforts also reveals that more than two years ago, FIO proposed to have property/casualty insurers submit zip – code level data. This effort was met with criticism from industry trades, who deemed the request too burdensome, overly broad, and unnecessary. FIO dropped the plan and then decided to collaborate with NAIC. However, rather than ensuring the accuracy of the data, the commissioners’ letter to DOGE claims that FIO went forward with “flawed information.”
The idea of eliminating the FIO is not new. In 2023, GOP members of the House of Representatives introduced a bill to do away with the FIO, which was established in 2010 as part of the Dodd – Frank Wall Street Reform and Consumer Protection Act. Additionally, earlier this month, a coalition of consumer, environmental, and fair housing groups called upon the FIO to release the homeowners insurance data. NAIC has yet to respond to a request for comment.
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