Clear Consumer Protection with State Insurance Regulation
Life insurers continue to provide essential support to their customers and the communities they serve during the COVID-19 pandemic. The life insurance industry was born out of the idea that no family should be on their own during hard times. Now more than ever, 90 million American families depend on our industry for life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, dental and vision and other supplemental benefits.
I suspect that very few of those families know that the life insurance industry is regulated by the states. Most probably don’t care, either — as long as they receive the benefits they’ve been promised by life insurers.
Life insurers have been keeping their promises to American consumers for more than 175 years. And through every national emergency, from World Wars I and II through the Great Depression on through the current COVID-19 crisis, the state-based system of insurance regulation has ensured that consumers are protected every step of the way.
That’s why the American Council of Life Insurers supports a legislative proposal on Capitol Hill spearheaded by Sen. Tim Scott (R-SC) that would clarify that state insurance departments are the primary regulators for the business of insurance—not the federal Consumer Financial Protection Bureau (CFPB).
The federal Dodd-Frank Act from 2010 wisely exempted insurance oversight from the CFPB’s authority. This proposed legislation supports the intent of Dodd-Frank and protects against overlapping and conflicting consumer regulations in the future.
Consumers have always benefitted from the clear, consistent consumer protections provided by the state-based system of insurance regulation. This is especially important now, during this period of intense economic disruption. And it will be equally critical when the economy starts to recover following the COVID-19 pandemic. The legislation being considered on Capitol Hill would provide much-needed certainty and clarity for consumers, at a time when they’ll need it most.