In January 2025, President Donald Trump signed Executive Order 14192, titled "Unleashing Prosperity Through Deregulation." The order marked a dramatic shift in federal regulatory policy: for every new regulation introduced, ten existing ones must be eliminated. This “10-for-1” rule takes a far more aggressive stance than the previous “two-for-one” policy, signaling a significant rollback of federal oversight.

The stated aim of this order is to drive economic growth and encourage innovation across key industries—including insurance. But for insurance companies, fewer rules don’t necessarily mean less complexity. In fact, the dismantling of long-standing regulations places firms in a new and uncertain environment, where they must rely more heavily on internal risk controls to stay protected.

Initial Reactions and Legal Roadblocks

Many businesses, especially those that have long struggled under the weight of compliance costs, initially welcomed the change. For them, less red tape could mean leaner operations and lower administrative burdens.

But insurance deregulation is rarely straightforward. Many of the planned repeals are already encountering legal pushback. The process of rolling back existing regulations is legally complex, involving procedural safeguards, public comment periods, and court challenges that could stall implementation.

This insurance deregulation wave has also reignited a larger debate among business and policy leaders: Does less government oversight improve operational efficiency, or does it open the door to irresponsible practices?

Supporters argue that reducing regulation frees companies to innovate and manage risks more flexibly. They often invoke the idea that “less government means better governance.” On the other hand, groups like ShareAction and the Interfaith Center on Corporate Responsibility (ICCR) warn that oversight plays a crucial role in promoting ethical conduct, environmental responsibility, and consumer protection.

At its core, the debate centers around finding the right balance—one that encourages growth without sacrificing long-term accountability and public trust.

A Look Back: When Deregulation Shaped Insurance Risk

The insurance sector has seen this movie before. Historical examples of insurance deregulation reveal both the promises and perils of rolling back oversight.

Take the liability insurance crisis of the 1980s. Between 1984 and 1987, premiums for general liability insurance in the U.S. nearly tripled—from about $6.5 billion to $19.5 billion. This pricing surge created a crisis for nonprofits, municipalities, and small businesses, many of whom could no longer afford coverage. Deregulation had allowed underpricing and lax underwriting practices to go unchecked, exposing insurers to major losses.

Another cautionary tale is the Commodity Futures Modernization Act (CFMA) of 2000. This legislation removed oversight from complex financial products like credit default swaps (CDS). In doing so, it paved the way for unchecked risk-taking in the derivatives market. When subprime mortgages started defaulting in the mid-2000s, these unregulated swaps played a major role in the 2008 global financial crisis. With no regulatory requirement for capital backing, institutions were left dangerously overexposed—and the collapse spread across the system.

Internationally, the Norwegian banking crisis of 1988–1992 illustrates similar patterns. After financial deregulation lifted interest rate caps and other restrictions, banks rushed into risky lending practices. A sharp drop in oil prices and other economic shocks exposed these vulnerabilities, leading to a systemic collapse that required government intervention.

What This Means for the Insurance Industry Today

The new deregulatory landscape shifts much of the responsibility for risk management back onto insurers themselves. Without strict federal mandates guiding capital requirements, underwriting standards, or product disclosures, companies must now self-regulate more rigorously.

This new environment demands:

• Stronger internal controls

• Smarter risk modeling

• Greater emphasis on corporate governance

• Vigilant scenario planning for economic shocks

Insurers that fail to adapt risk ending up in the same vulnerable positions seen in past crises. Financial instability, legal liabilities, and reputational damage could all loom large if risks are misjudged or ignored.

The Road Ahead

The full impact of Executive Order 14192 remains uncertain. Whether it becomes a springboard for innovation or a trigger for the next financial disruption depends largely on how insurance companies respond.

Deregulation may offer new freedoms—but with them comes greater accountability. The industry must tread carefully to seize new opportunities without compromising stability, transparency, or trust.