Senate Introduces Insurance Data Protection Act to Limit Federal Overreach

U.S. Senator Katie Britt has introduced the Insurance Data Protection Act (S. 1544) to reaffirm state authority over insurance regulation and limit the Federal Insurance Office's (FIO) overreach. The bill aims to rescind FIO's subpoena power, emphasizing that insurance regulation remains a state jurisdiction as originally intended under the Dodd-Frank Act. It mandates coordination between FIO and state regulators on data collection to avoid duplication and reduces administrative burdens on insurers.

This legislation responds to concerns about FIO's recent collection of detailed climate-related risk data, which added compliance costs and conflicted with state regulatory efforts. By setting clear confidentiality and data use standards, the Act seeks to safeguard sensitive consumer information from federal misuse. The bill has garnered support from key Senate Republicans and major insurance industry groups, reflecting broad backing within the sector.

The Act underscores the long-standing state-based model of insurance regulation credited with fostering competitive and fair insurance markets. It aims to preserve this framework by clarifying the FIO's role as informational rather than regulatory, preventing federal encroachment. The legislation also responds to the Biden administration's efforts perceived as expanding federal influence in the insurance space through politically driven initiatives.

Enforcement provisions in the bill focus on ensuring that federal data collection efforts complement, not complicate, state regulatory processes while protecting insurer and consumer data confidentiality. The Act represents a significant step in addressing federal-state regulatory tensions and maintaining a stable regulatory environment for insurers and consumers alike.