When does legislation that is supposed to scale back onerousfederal regulation actually end up strengthening it? When itcontains a provision that has the potential of creating a federalinsurance czar.

The Financial CHOICE Act is designed to reformDodd-Frank and get rid of the many restrictions it places on theability of our financial system to function in a manner that willgrow our economy. In most respects, it does an excellent job ofthis. But inexplicably, the CHOICE Act contains a provision thatcould increase, rather than reduce, federal encroachment oninsurance.

Potential for full-fledged bureaucracy

The provision in question merges the Federal InsuranceOffice (FIO) with the independent member with insuranceexpertise on the Financial Stability Oversight Council (FSOC), tocreate the Office of Independent Insurance Advocate. This provisionruns completely counter to the intent of CHOICE reform by creatinga new, expansive, and equally unnecessary structure with thepotential to grow quickly into a full-fledged federal insurancebureaucracy. 

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

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