Navigating the Risks: What the 10-for-1 Deregulation Order Means for the Insurance Industry
In January 2025, President Donald Trump signed Executive Order 14192, titled "Unleashing Prosperity Through Deregulation." This sweeping policy mandates that for every new federal regulation introduced, ten existing ones must be eliminated—an aggressive escalation from the earlier “two-for-one” rule that defined his first term.
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The goal behind this initiative is to cut bureaucratic red tape and encourage economic growth, with potential ripple effects across all sectors—including insurance. But while this move is framed as a catalyst for innovation and efficiency, it also raises major questions about risk management in a suddenly less-regulated environment.
Without the familiar guardrails, insurance deregulation companies are now navigating an uncertain landscape. To thrive—and survive—in this new era, they’ll need to revisit internal controls, rethink risk models, and take a more proactive approach to managing exposure.
First Reactions: Hope, Hesitation, and Legal Hurdles
For companies long burdened by the cost and complexity of compliance, the promise of fewer regulations is understandably appealing. Reduced oversight can mean lower administrative expenses, faster product development, and more room to innovate.
However, the reality of implementing such sweeping deregulation is far from straightforward. Many of the proposed repeals are already facing legal challenges. The process of dismantling regulations involves strict procedures, public review periods, and the potential for court intervention—meaning change will likely be slow and contested.
This deregulatory agenda has also sparked a wider debate. Supporters argue that cutting red tape lets businesses operate more efficiently and adapt faster to market needs. Critics, however, caution that regulation exists for a reason—namely to protect consumers, promote fair competition, and ensure responsible corporate behavior.
Groups like ShareAction and the Interfaith Center on Corporate Responsibility (ICCR) emphasize that oversight is essential for driving progress on environmental, social, and governance (ESG) issues. Without it, they argue, there’s a greater risk that short-term profits will take precedence over long-term responsibility.
Lessons from the Past: Deregulation’s Impact on Insurance
The insurance industry has seen the effects of insurance deregulation before—and the outcomes haven’t always been positive.
One major example is the liability insurance crisis of the 1980s. Between 1984 and 1987, premiums for general liability coverage nearly tripled—from around $6.5 billion to $19.5 billion. Many organizations, from local governments to nonprofits, found themselves priced out of coverage or unable to secure it altogether. Loosely regulated pricing and underwriting contributed to this instability, highlighting how easily the market can spiral when guardrails are removed.
Another stark reminder came in the form of the Commodity Futures Modernization Act (CFMA) of 2000, which excluded financial derivatives like credit default swaps (CDS) from regulatory oversight. By removing scrutiny from these complex instruments, the CFMA helped pave the way for the 2008 financial crisis. Institutions traded risk-heavy CDSs without the capital reserves to back them up, and when mortgage defaults soared, the system buckled—triggering a global meltdown.
And this isn’t just a U.S. phenomenon. Consider Norway’s banking crisis between 1988 and 1992. After financial insurance deregulation lifted lending rate caps and other restrictions, banks engaged in risky lending that eventually led to a collapse when oil prices fell and the economy turned. Once again, deregulation without appropriate risk controls proved destabilizing.
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