The National Association ofProfessional Insurance Agents (PIA) has senta letter to Jeb Hensarling,Chairman of the House Financial Services Committee, expressingconcerns about the creation of a new federal office called theOffice of the Independent Insurance Advocate within the Treasury Department.

Ironically, the new federal office with greatly expanded powerswould be created by a provision included in the Financial CreatingHope and Opportunity for Investors, Consumers, and Entrepreneurs(CHOICE) Act — legislation intended to reduce, not increase,federal encroachment resulting from the Dodd-Frank Act.

Related: PIA calls for repeal of Federal InsuranceOffice

'Unnecessary federal insurance bureaucracy'

"This provision of the Financial Choice Act runs completelycounter to the intent of Dodd-Frank reform by creating a new,expansive and unnecessary federal insurance bureaucracy with thepotential to grow," said PIANational Executive Vice President & CEO MikeBecker. "The Independent Insurance Advocate could lead to afederal insurance czar with no supervision, who would be positionedto usurp our strong and effective system of state insuranceregulation."

"Congress has a mandate to rein in federal bureaucracies — notcreate new ones," Becker said. "We call on lawmakers to remove thisprovision from the Financial CHOICE Act. PIA opposes the creationof an Office of the Independent Insurance Advocate"

The language in question merges the Federal Insurance Office(FIO) with the independent member with insurance expertise on theFinancial Stability Oversight Council to create the Office ofIndependent Insurance Advocate. PIA and the National Association ofInsurance Commissioners (NAIC) have both already called for thecomplete elimination of the FIO, because it is unnecessary.

Senate-confirmed presidential appointee

The director of the new office would be a Senate-confirmedpresidential appointee with a six-year term. The new office wouldhave its own budget and would be able to hire its own employees,including attorneys, analysts, and economists.

Although housed in the Treasury Department, the bill haslanguage prohibiting the Secretary of the Treasury from takingaction to "delay or prevent the issuance of any rule or thepromulgation of any regulation by the Independent InsuranceAdvocate," and prohibiting the Treasury Secretary from intervening"in any matter."

Related: How long will congressional action be generallyfavorable?

"We are struck by how powerful this position would be," said PIANational Vice President of Government Relations JonGentile. "This office could potentially grow in a manner that wouldlead to a federal regulatory bureaucracy."

Nationwide grassroots campaign

PIA announced plans to conduct a nationwide grassroots campaignurging Congress to both repeal the Federal Insurance Office, andprevent creation of an Office of the Independent InsuranceAdvocate. PIA is currently the only national association publiclyadvocating against the creation of this new insurance office.

Founded in 1931, PIA is a national trade association thatrepresents member insurance agents and their employees who sell andservice all kinds of insurance, but specialize in coverage ofautomobiles, homes and businesses.