S.1544 - Insurance Data Protection Act (119th Congress)
Summary
The Insurance Data Protection Act aims to limit the ability of the Federal Insurance Office (FIO) and other financial regulators from directly collecting data from insurance companies. It repeals the subpoena and enforcement authority of the FIO and places restrictions on data sharing. The bill also emphasizes the confidentiality of data collected from insurance companies by financial regulators, requiring coordination with other agencies and adherence to the Paperwork Reduction Act.
Expected Effects
The act would reduce the regulatory burden on insurance companies by limiting direct data collection. It would also shift the responsibility for data gathering to other agencies and publicly available sources. This could lead to less regulatory oversight of the insurance industry at the federal level.
Potential Benefits
- Reduced regulatory burden on insurance companies, potentially freeing up resources for investment and innovation.
- Protection of sensitive insurance data through enhanced confidentiality measures.
- Streamlined data collection processes by encouraging coordination among regulatory bodies.
- Prevention of duplicative data requests by ensuring regulators first seek existing data from other sources.
- Increased transparency in data collection practices through adherence to the Paperwork Reduction Act.
Most Benefited Areas:
Potential Disadvantages
- Potential reduction in the ability of federal regulators to monitor the insurance industry effectively.
- Increased risk of financial instability due to limited access to timely and comprehensive data.
- Possible gaps in data collection if other agencies or public sources cannot provide the necessary information.
- Reduced ability to proactively identify and address systemic risks within the insurance sector.
- Increased complexity for regulators who must now coordinate with multiple agencies to obtain data.
Constitutional Alignment
The bill's focus on limiting federal regulatory power aligns with principles of federalism, which seeks to balance power between the federal government and the states. By restricting the direct data collection authority of federal agencies like the FIO, the bill potentially reinforces the role of state insurance regulators. The emphasis on data confidentiality could also be seen as aligning with the Fourth Amendment's protection against unreasonable searches and seizures, although this is an indirect connection.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).