When does legislation that is supposed to scale back onerous federal regulation actually end up strengthening it? When it contains a provision that has the potential of creating a federal insurance czar.

The Financial CHOICE Act is designed to reform Dodd-Frank and get rid of the many restrictions it places on the ability of our financial system to function in a manner that will grow our economy. In most respects, it does an excellent job of this. But inexplicably, the CHOICE Act contains a provision that could increase, rather than reduce, federal encroachment on insurance.

Potential for full-fledged bureaucracy

The provision in question merges the Federal Insurance Office (FIO) with the independent member with insurance expertise on the Financial Stability Oversight Council (FSOC), to create the Office of Independent Insurance Advocate. This provision runs completely counter to the intent of CHOICE reform by creating a new, expansive, and equally unnecessary structure with the potential to grow quickly into a full-fledged federal insurance bureaucracy. 

Reading the draft of the CHOICE Act, we cannot help but be struck by how powerful the Office of the Independent Insurance Advocate would be. The director of the new office would be a Senate-confirmed presidential appointee with a six-year term. The new office would have its own budget and would be able to hire its own employees, including attorneys, analysts, and economists.