McCarran-Ferguson Restoration Act

Bill Number

H.R. 7130

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2026-01-16: Referred to the House Committee on Financial Services.

Last Updated

2026-06-30T08:06:48Z

AI-Generated Summary

Purpose of the Legislation

The McCarran-Ferguson Restoration Act (H.R. 7130) aims to eliminate the Federal Insurance Office (FIO) within the Department of the Treasury and replace it with a new position, the United States Insurance Representative (USIR). This shift focuses federal involvement on international prudential (financial safety and stability) aspects of insurance, while preserving the primary role of states in regulating insurance domestically. The act seeks to restore and clarify the balance established by the McCarran-Ferguson Act of 1945, which emphasizes state authority over insurance regulation.

Key Provisions

• Elimination of the Federal Insurance Office: The FIO and its Director are abolished, but this does not limit the Treasury Secretary's broader authority on insurance-related matters.
• Establishment of the United States Insurance Representative:
• The Treasury Secretary must appoint a USIR within one year of enactment and hire experts in insurance.
• Duties include coordinating federal policy on international insurance matters, representing the U.S. in global bodies like the International Association of Insurance Supervisors, assisting in negotiating international agreements (called "covered agreements"), determining if state insurance rules conflict with these agreements, supporting the Terrorism Risk Insurance Program, consulting with states on national or international insurance issues, and advising the Treasury Secretary.
• Scope: Covers all insurance lines except health insurance, most long-term care insurance (with coordination for cases bundled with life or annuity products), and crop insurance.
• Preemption of State Insurance Measures:
• State laws, rules, or practices (termed "state insurance measures") can only be preempted (overridden by federal action) if they treat foreign insurers worse than U.S. insurers and conflict with a covered agreement, while maintaining equivalent consumer protection to state standards.
• Process: Involves notifying and consulting states and the U.S. Trade Representative, publishing notices in the Federal Register, allowing public comments, setting a minimum 30-day delay before effectiveness, and notifying Congress. Preempted measures cannot be enforced by states.
• Determinations are subject to the Administrative Procedure Act, with de novo judicial review (a fresh court evaluation without deference to the agency's decision).
• Rules of Construction: Explicitly protects state control over insurer rates, premiums, underwriting, sales practices, coverage requirements, antitrust laws, and solvency (except in cases of discriminatory treatment of foreign insurers). It does not grant the USIR general regulatory power over insurance or alter other federal authorities.
• Reporting Requirements: Annual reports to Congress on preemption actions starting two years after enactment; a one-time study on international insurance coordination and U.S. insurer competitiveness within two years.
• Use of Resources: The USIR can use existing Treasury personnel and facilities.
• Definitions: Key terms include "covered agreement" (international pacts on insurance safety measures), "insurer" (any entity in the insurance business, including reinsurance), and distinctions between U.S. and non-U.S. insurers.

Significant Changes to Existing Law

• Replaces the FIO, created under the Dodd-Frank Act of 2010, with the narrower USIR role, removing broader monitoring and advisory functions on domestic insurance access and affordability.
• Amends the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act (2018) to substitute references to the FIO Director with the USIR or Treasury Secretary.
• Adds a State Insurance Commissioner (appointed by the President with Senate confirmation, recommended by the National Association of Insurance Commissioners) as a voting member of the Financial Stability Oversight Council (FSOC), replacing the FIO Director's non-voting role. This includes provisions for acting commissioners and extended terms during vacancies.
• Introduces a structured federal preemption mechanism tied solely to international agreements, which did not exist in this form previously, while codifying limits to prevent federal overreach into state domains.

Potential Impacts

• On Government Agencies: The Treasury Department will restructure its insurance functions, potentially streamlining international efforts but requiring new hires and coordination. The FSOC gains a state perspective, which could influence financial stability decisions. State regulators may face more federal consultations but retain core authority.
• On Citizens: Insurance consumers are likely to see minimal direct changes, as state regulation of rates, coverage, and sales remains intact. However, international agreements could lead to more uniform treatment of foreign insurers, potentially affecting reinsurance availability or costs indirectly.
• On International Relations: Enhances U.S. coordination in global insurance forums, facilitating negotiations on cross-border standards that promote fair treatment of U.S. insurers abroad, which could strengthen trade ties in financial services.

Main Stakeholders Affected

• Department of the Treasury: Directly restructures its insurance oversight.
• State Insurance Regulators and the National Association of Insurance Commissioners: Gain a voice in FSOC and input on preemption decisions, but may need to adjust to federal reviews of measures conflicting with international pacts.
• Insurance Industry (U.S. and Foreign Insurers): U.S. insurers benefit from representation in international negotiations; foreign insurers gain protections against discriminatory state rules.
• Consumers and Policyholders: Primarily affected through state-level protections, with indirect benefits from stable international reinsurance markets.
• Congressional Committees: Financial Services and Ways and Means (House); Banking, Housing, and Urban Affairs and Finance (Senate) receive reports and notifications.
• U.S. Trade Representative and Other Federal Agencies: Involved in consultations on trade-related insurance issues.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces the McCarran-Ferguson Act's deference to states (a federalism principle under the U.S. Constitution's 10th Amendment, reserving powers to states), limiting federal preemption to narrow international contexts. The de novo review provision could increase court challenges to preemption decisions, ensuring accountability but potentially delaying resolutions.
• Constitutional: Balances federal authority in foreign affairs (Article I, Section 8) with state regulatory powers, avoiding broad federal intrusion that might raise Commerce Clause concerns.
• Political: Signals a push toward deregulation at the federal level while empowering states, potentially appealing to those favoring localized control. The state commissioner's Senate-confirmed FSOC role introduces bipartisanship via industry recommendations, but could spark debates on federal versus state influence in financial stability. No broad impacts on other laws like the Consumer Financial Protection Act are intended.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Downing, Troy [R-MT-2]

Cosponsors (4)

Rep. Fitzgerald, Scott [R-WI-5], Rep. Ogles, Andrew [R-TN-5], Rep. Nehls, Troy E. [R-TX-22], Rep. Harris, Andy [R-MD-1]

Recent Actions

• 2026-01-16: Referred to the House Committee on Financial Services.
• 2026-01-16: Introduced in House
• 2026-01-16: Introduced in House

Bill Versions

• McCarran-Ferguson Restoration Act — issued 2026-01-16 — PDF (19 pages)