Sponsors (2)
The bill aims to improve insurance-sector expertise and clarity in FSOC governance and preserve short-term continuity for state regulators, but it trades off increased politicization, potential reductions in state voting influence (especially during vacancies), legal uncertainty from textual changes, and greater federal–state coordination risk.
State insurance commissioners (state governments) gain a clearer path to having an insurance-expert voice on the Financial Stability Oversight Council because the bill creates/recognizes a seat tied to NAIC-recommended candidates, increasing likelihood that FSOC appointees have relevant insurance expertise and industry legitimacy.
State insurance regulators retain representation continuity during transitions because the bill preserves existing nonvoting rules temporarily and provides for an interim nonvoting designate selected by peers, reducing gaps in state input and short-term uncertainty for markets and firms.
The bill clarifies statutory language (defines 'Council', fixes cross-references and minor wording), which reduces ambiguity for regulators and firms and lowers the risk of compliance confusion and drafting disputes.
State governments and taxpayers face greater politicization and potential delays because the bill creates a new Senate‑confirmed seat, which can slow nominations/confirmations and leave the seat vacant for longer.
State regulators and the FSOC's insurance-sector expertise could be weakened because removing or downgrading a state-designated voting role (and making interim designees nonvoting) reduces states' voting influence and timely input on systemic-risk decisions.
Removing formal state-level representation risks increasing federal–state friction and coordination costs when addressing insurer distress or regulatory gaps, potentially raising taxpayer exposure and slowing crisis responses.
Based on analysis of 5 sections of legislative text.
Adds a permanent voting FSOC seat for a State insurance commissioner, sets NAIC consultation and unique vacancy rules, removes the statutory nonvoting listing, and makes technical edits to the Financial Stability Act.
Official title: To amend the Financial Stability Act of 2010 to include the State insurance commissioner as a voting member of the Financial Stability Oversight Council, and for other purposes.
Introduced May 13, 2025 by Barry D. Loudermilk · Last progress May 13, 2025
Adds a permanent voting seat on the Financial Stability Oversight Council (FSOC) for a State insurance commissioner, changes how that seat is appointed and temporarily filled, removes the separate nonvoting listing for a State insurance commissioner, preserves the prior nonvoting arrangement during a transition period, and makes a set of technical and clarifying edits to the Financial Stability Act of 2010. The bill requires the President to request recommended candidates from the National Association of Insurance Commissioners (NAIC) before appointment (with limited exceptions), exempts the seat from the Federal Vacancy Reform Act, and establishes state-designated interim nonvoting representation until a confirmed appointee serves.