State Insurance Regulation Preservation Act

Floor Speech

Date: Sept. 12, 2018
Location: Washington, DC


Mr. ROTHFUS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5059) to amend the Home Owners' Loan Act with respect to the registration and supervision of insurance savings and loan holding companies, and for other purposes, as amended.

The Clerk read the title of the bill.


Mr. Speaker, I rise in support of H.R. 5059, the State Insurance Regulation Preservation Act. I want to thank Chairman Hensarling and Ranking Member Waters for their support for this bill. I also want to commend my colleague, Representative Joyce Beatty from Ohio, for her leadership on this issue. It has been a pleasure working with Representative Beatty, the ranking member's staff, and the Federal Reserve to ensure that this legislation is balanced, effective, and bipartisan.

This bill is a good example of how solutions-minded Members from both sides of the aisle can come together to address a clear problem. H.R. 5059 is a commonsense, right-regulation bill that calls on the Federal Reserve to tailor the supervision of insurance-focused savings and loan holding companies.

As many of you know, Dodd-Frank brought savings and loan holding companies under the Federal Reserve's supervision for the first time. Despite the fact that Dodd-Frank also reaffirmed a State-based model of insurance regulation, a principle that we all support, the law had the effect of also bringing insurance savings and loan holding companies, or ISLHCs, under the Fed's purview.

These are firms that are overwhelmingly engaged in the business of insurance but also happen to own thrift subsidiaries. These insurance companies are simultaneously regulated by the Fed and the States. The lack of clarity regarding how Fed supervision of these insurers should complement rather than supplant State regulation has led to regulatory inefficiency, duplication of effort, and higher compliance costs.

Bank-centric Fed supervision has also been a poor fit for companies that are primarily in the insurance business and has not been consistent with the actual risks posed by ISLHCs. All of this cost and complexity eventually impact consumers through higher prices and reduced access to services.

I should also point out that the burden of duplicative supervision has encouraged a significant number of these insurance companies to get rid of their thrift subsidiaries. Today, fewer than half of the insurance savings and loan holding companies that existed when Dodd- Frank was enacted continue to operate under the same model.

H.R. 5059 streamlines regulators' approach to ISLHCs by enacting the following reforms.

If an ISLHC has filed a report with another Federal or State regulator, the Fed will be required to request that report from that regulator first before requesting the information from the company. This prevents compliance staff from being required to respond to duplicative information requests.

H.R. 5059 also requires the Fed to align recordkeeping requirements with those imposed by State insurance authorities to avoid duplication.

The bill also requires that Fed examinations be coordinated, to the fullest extent possible, with State and Federal authorities. Again, this will help to reduce unnecessary duplication and conflict.

The bill further requires the Fed to craft a supervisory framework that appropriately tailors the supervision of ISLHCs. It then requires a review of existing supervisory guidance to ensure that it is consistent with the new framework.

All of these reforms will provide greater regulatory clarity and efficiency, and reduce unnecessary compliance burden. In doing so, we can ensure that these companies can continue to serve their customers without sacrificing the safety and soundness of our financial system.

Mr. Speaker, I urge my colleagues to support H.R. 5059, and I reserve the balance of my time.


Mr. ROTHFUS. Mr. Speaker, I thank Representative Beatty for working together on this very particular piece of legislation.

Again, this is a right-sized regulation that enjoys strong bipartisan support and sets forth the appropriate framework for regulating insurance savings and loan holding companies in this area.

Mr. Speaker, I request that my colleagues vote ``yes'' on this legislation, H.R. 5059, and I yield back the balance of my time.