United States: Post-Election Outlook – Key Issues Affecting Insurers

Donald Trump's election to the presidency, together with Republican retention of control of both houses of the 115th Congress, could signal consequential changes in a number of key areas of regulation affecting insurance. The two political branches of the federal government revert to full Republican control for the first time since January 2007, although with 48 seats in the Senate, the Democrats will retain the ability to filibuster legislation.

Dodd-Frank Act

President-elect Trump has consistently criticized the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") in his campaign, and his administration's transition website pledges to work to "dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."

A complete repeal of Dodd-Frank would undo all regulation of "systemic" risk (including the ability to designate an insurer as a systemically important financial firm subject to regulation by the Federal Reserve Board) and curtail federal capital requirements on systemically important insurers and insurers that own depositary institutions. It seems reasonable to expect, however, that any repeal proposal likely to move forward would maintain some of Dodd-Frank's regulatory architecture as well as spare the Nonadmitted and Reinsurance Reform Act ("NRRA"). Adopted as part of Dodd-Frank, after having been sought by industry for years, the NRRA imposes a uniform choice-of-law regime on surplus lines and credit for reinsurance.

Two proposals from the current (114th) Congress may offer clues to what a rollback of Dodd-Frank might look like. Both were stranded in Congress in the shadow of what would have been a certain presidential veto under a Democratic administration, but could be revived under the Trump administration and the Republican-controlled Congress. Neither addresses the NRRA, which would apparently remain intact under either proposal.

  • Earlier this year, H.R. 5983, the Financial CHOICE Act of 2016, was introduced by Rep. Jeb Hensarling, chairman of the House Financial Services Committee. Rep. Hensarling has been mentioned as a possible Treasury secretary in the Trump administration, but appears likely to remain as Financial Services chair in the House. The CHOICE Act eliminates much of the systemic risk provisions of Dodd-Frank as well as the orderly liquidation authority (resolution of institutions whose failure would have systemic consequences). In addition, the CHOICE Act would replace the Federal Insurance Office (an advisory body formed by Dodd-Frank) with an "independent insurance advocate" whose role would be to "act as an independent advocate of the interests of United States policyholders on prudential aspects of insurance matters or importance." According to press reports, Rep. Hensarling has been in discussions with the incoming Trump administration about the prospects for the CHOICE Act in the new Congress. 
  • Last year, Sen. Richard Shelby (R-Ala.), the chairman of the Senate Banking Committee, introduced the Financial Regulatory Improvement Act of 2015 (the "Shelby Bill"), which would significantly amend Dodd-Frank by reforming the SIFI-designation process, deferring certain matters to state regulators and imposing limitations on the federal government in certain insurance-related financial regulatory activities. For our client alert on an earlier version of the Shelby Bill, click here. Sen. Shelby is term-limited as the chair of the Senate Banking Committee (the committee through which any financial reform legislation would need to pass) and is likely to be replaced by Sen. Michael Crapo (R-Idaho) in 2017.

Patient Protection and Affordable Care Act

One of the most visible issues in the 2016 campaign was the future of the Patient Protection and Affordable Care Act (the "ACA"), colloquially known by both supporters and detractors as "Obamacare." Adopted in 2010 over the bitter opposition of the Republican minority in Congress, the ACA has survived the 2011-2016 age of divided government, with Republican Congresses passing numerous bills repealing or otherwise scaling back the law, and President Barack Obama exercising or threatening his veto and issuing executive actions to preserve it. During the campaign, President-elect Trump vowed to repeal the ACA, but since the election he has indicated he would retain certain aspects of the law, such as guaranteed-issue (i.e., the prohibition on declining a person for coverage based on a pre-existing condition).

Given the ACA's massive scope and extensive implementation to date, a full discussion of the possible consequences of repeal are beyond the scope of this alert, but we note a few key items from an insurance regulatory perspective. The ACA is notable for introducing a very meaningful federal role in the regulation of health insurance policies and plans, particularly insofar as rate and form regulation is concerned. Repeal would largely return these matters to exclusive state regulatory control. Furthermore, the establishment of the health care "exchanges" mandated by the ACA has had a profound impact on the health care insurance market across the country; any unwinding of exchanges is likely to be equally consequential, presenting challenges to state insurance and health care regulators as they seek to stabilize markets. In addition, repeal would require some resolution or other disposition of all of the state cooperatives formed under the ACA, a number of which have already been struggling.

US-EU Covered Agreements

Over the past year, the U.S. Department of the Treasury and the Office of the U.S. Trade Representative have been engaged in negotiations with the European Union on a "covered agreement" in order to address concerns regarding the imposition by European regulators of Solvency II standards on U.S. insurance companies. These covered agreements may include agreements on reinsurance collateral, group supervision and the sharing of confidential information. (Such covered agreements are authorized under the NRRA.) While personnel changes at the Treasury Department and the Trade Representative Office may delay the negotiation process if an agreement is not reached by Inauguration Day on January 20, 2017, neither the Trump campaign nor the transition team has intimated the incoming administration's policy position with respect to the ongoing negotiations.

DOL Regulation Affecting Fixed Annuities

A closely watched U.S. Department of Labor regulation scheduled to take effect in April 2017 would expand the definition of "fiduciary" for purposes of employee benefits rules. The expanded definition would capture sellers of fixed annuities, which under current law are not covered. The regulation would also narrow an exemption, currently available to sellers of insurance products, from the rules on "prohibited transactions" between plan fiduciaries and plans. Under the regulation, among other things, a fiduciary selling fixed annuities to a plan would be required to act "in the best interest" of the plan and observe other restrictions in order to invoke the exemption. The DOL regulation would significantly impact distribution models and compensation for the sales of annuities to retirement plans and accounts. The industry has expressed hope that the DOL under the Trump administration would delay implementation of the regulation or revoke it altogether.

Iran Nuclear Deal and State Insurance Laws

While the Joint Comprehensive Plan of Action ("JCPOA"), more colloquially known as the Iran nuclear agreement, does not explicitly pre-empt state laws, insurance or otherwise, that prevent or penalize investments in persons related to the Iranian regime, Supreme Court precedent suggests that such state laws may be unenforceable in light of the federal government's phased-out sanctions relief policy vis-a-vis the JCPOA. At times President-elect Trump has promised to withdraw from the multiparty deal, while at other times Mr. Trump indicated that he would renegotiate the deal. If the JCPOA is indeed abrogated, then states will have considerably more latitude to continue to enact and enforce state sanctions, including those that affect the insurance industry.


As with any new administration, particularly when there is a shift of power between the parties, there will inevitably be personnel shake-ups at relevant federal agencies that may impact the direction of insurance regulation. Two federal agencies deal specifically with insurance – the Federal Insurance Office ("FIO"), created as an advisory body under Dodd-Frank, and the Financial Stability Oversight Council ("FSOC"). With respect to the FIO, the director of such agency is appointed by the Treasury Secretary, a position that Mr. Trump has yet to nominate someone to fill.

S. Roy Woodall, Jr., the FSOC's independent member with insurance expertise, is near the end of his six-year term which is set to expire in September 2017. President Trump will have the opportunity to reappoint Mr. Woodall or appoint a replacement independent member with insurance expertise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions