Putting America First in the Global Insurance Market

CLEVELAND, OH - JULY 20: A delegates holds up signs that read "Make America First Again" during the opening of the third day of the Republican National Convention on July 20, 2016 at the Quicken Loans Arena in Cleveland, Ohio. Republican presidential candidate Donald Trump received the number of votes needed to secure the party's nomination. An estimated 50,000 people are expected in Cleveland, including hundreds of protesters and members of the media. The four-day Republican National Convention kicked off on July 18. (Photo by Jeff Swensen/Getty Images)
Trades, deals, tariffs. These terms have enjoyed a constant presence in the news cycle as the U.S. adapts to a more connected global market. Every major sector and industry is having to adjust to this reality. This leads many Americans to wonder what this means for them. As the world becomes smaller, the influence of the average citizen on their government can become lost amongst the geopolitical interests that are vying to compete in the global economy.  
As the discussion grows more global, it is easy to lose sight of the fact that the United States is a collection of 50 very different territories with different economic compositions and needs. While the term “States’ rights” can be a loaded term, the question remains: in a global economy, what are the states’ rights? Moreover, as the Federal government negotiates our place among foreign powers, how are the interests of the states protected?  
H.R.4537, the International Insurance Standards Act, sponsored by U.S. Representative Sean Duffy (R-WI) and co-sponsored by Representative Denny Heck (D-WA) does just that. Passing a voice vote on the House floor, the bill, on its way to the Senate, balances states rights and federalism with the checks and balances between the legislative and executive branches, while ensuring the integrity of our insurance system in the face of an ever-changing geopolitical landscape. 
The current insurance system in the U.S. is regulated at the state-level. Since the 19th century, insurance has been taxed and regulated by state government, an arrangement that has several benefits. Aside from the revenue to the states that is generated from insurance taxation, state-based regulation allows insurance regulators and providers to be more nimble and responsive to the needs of Americans. Insurance markets and needs are incredibly diverse from state to state (for example, the Florida insurance market is very different than the market in Kansas). The ability to localize regulation reduces costs for consumers and providers alike.  
The International Insurance Standards Act preserves the integrity of our state-based system, while still allowing federal trade negotiators to work with foreign governments on global insurance policies. The Act requires negotiators to coordinate with state insurance regulators when developing international insurance standards, and to notify Congress about the negotiations.  
The Dodd-Frank Act of 2010, among other things, created the Federal Insurance Office (FIO) and gave it authority over certain aspects of state insurance markets. In doing so, Dodd-Frank gave the FIO the ability to override state authorities in international agreements. This means that FIO negotiators can change the way states handle insurance, affecting consumer policies in ways that are not reflective of their needs. 
The legislation gives state regulators a seat at the table, and provides Congressional oversight to ensure that consumers aren’t negatively affected by international negotiations.  
Critics of the legislation have brought up several concerns, most notably that it unconstitutionally usurps the authority of the executive branch in diplomatic relations and hobbles the ability to negotiate. This is not a fair assessment, as it could be argued that the FIO should not have had this authority in the first place. Further, the ability to negotiate is still there, but negotiators are simply required to consult with those that will be most affected by the negotiation.  
President Donald Trump’s campaign theme “America First” was a promise to the American people that their interests would be protected when dealing with foreign powers, foreign powers that are operating in their own interests and not those of Americans. Historically, President Trump has opposed measures that have been perceived to limit the executive’s ability to conduct foreign relations. Hopefully, as the bill makes its way through the Senate, the President’s office will see it as an opportunity to truly put America first.