For more than 150 years the state-based system of insuranceregulation has worked, successfully protecting consumers andcreating a competitive and diverse U.S. insurance market.

In fact, a report issued by the Government Accountability Office (GAO) in June2013 found the state-based system of insurance regulation helped tomitigate the negative effects of the 2007-2009 financial crisis onthe insurance industry.

Now, the election of Donald Trump as president and a Republicanmajority in both houses of Congress will bring about a uniqueopportunity to re-examine the regulatory framework forinsurance.

PIA opposed creation of the FIO from outset

With Congress poised to significantly roll back key provisionsof the Dodd-Frank Wall Street Reform and Consumer Protection Act,the time is right to include a full repeal of the Federal Insurance Office (FIO) as part of anyfinancial regulatory reform package. Our longstanding and robuststate-based insurance regulatory system does not require this levelof federal oversight.

PIA opposed the creation of the FIO from the outset. In 2010,advocates of federal insurance regulation succeeded in getting theFIO established as part of the Wall Street Reform and ConsumerProtection Act (Dodd-Frank) — but PIA, along with others inindustry, fought back attempts to give this office broad authority.In the end, protections against the FIO acting as a regulator ofthe business of insurance were included.

One only needs to look at recent actions by FIO to see why itsexistence is inappropriate. In November 2016 it issued a reportrecommending that Congress consider prescribing a uniform nationalstandard for state guaranty association coverage limits. Thisreport only validates our concerns that the FIO's ultimate aim isto federalize or itself become a federal regulator ofinsurance.

Repeal, and don't replace

A version of Dodd Frank reform that was introduced and passedthe House Financial Services Committee last year, the Financial CHOICE Act, is expected to be reintroducedearly in the new 115^th Congress. PIA has raised concernabout one provision included in this bill that would create a newfederal office called the Office of the Independent InsuranceAdvocate, within the Treasury Department. The head of this newoffice would be confirmed by the Senate and given a six-year term,while the current FIO director is a Senior Executive ServiceEmployee in the Department of the Treasury.

The proposed Independent Advocate office would have the power tohave its own budget, hire staff and engage attorneys. It isexpected to coordinate federal efforts on international insurancematters, including at the InternationalAssociation of Insurance Supervisors (IAIS), and assist innegotiating covered agreements, monitor the insurance industry,recommend insurance companies to be designated for heightenedprudential standards and supervision and administer the TerrorismRisk Insurance Program. This office would have the potential tomorph into an FIO on steroids.

We were somewhat pleased that the office would be given no broadauthority to regulate or supervise insurance. That said, ourconcerns with the very existence of this office have continued, asfederal offices tend to gain more power over time — not less.

Unintended consequences

Given the concentration of power in this proposed office, we areconcerned about unintended consequences of the independentinsurance advocate developing into an even stronger Federalinsurance entity by formalizing a position with an even broadermandate. While the FIO has adhered to its limited mandate, it hasindicated from time to time that it wishes to expand federalauthority and has advocated for national standards.

Neither the Federal Insurance Office nor an Office of theIndependent Insurance Advocate are needed.

If the goal of the new Congress is to eliminate unnecessaryfederal regulation, getting rid of the FIO makes solid sense. Doingso would reaffirm that regulation of insurance should continue tobe the responsibility of the states.

We look forward to working with Congress to repeal the FIO andcontinue to cultivate the well-functioning system of stateinsurance regulation.

Related: What does a Trump presidency mean for the P&Cindustry

Jon Gentile is Vice President of Government Relations of theNational Associationof Professional Insurance Agents (PIA) based in Alexandria, Va. Opinions expressed in thisarticle are the author's own.