On August 7, 2025, the White House issued an Executive Order titled “Guaranteeing Fair Banking for All Americans,” which is intended to address instances of unfair discrimination in banking decisions by financial institutions driven by reputational, political, religious, and other criteria not based on risk-based analysis.[1] Specifically, the Executive Order addresses “politicized or unlawful debanking,” which is defined to include acts “by a bank, savings association, credit union, or other financial services provider . . .” Though an insurer can be construed as a “financial services provider,” the Executive Order does not purport to include insurers within that phrasing, nor would the President be capable of extending the scope of the Executive Order to the business of insurance, because the McCarran-Ferguson Act would prohibit the Executive Order’s application as a function of preemptive state-based regulation of unfair insurance trade practices, including unfair discrimination in coverage and rating decisions.
That acknowledged, some state legislatures have proposed laws that would put similar principles in place, and the likelihood of those laws passing could increase as a function of the President’s recent endorsement, through the Executive Order, of actions limiting what the administration construes as politicized debanking. One state, Tennessee, has already enacted legislation based on similar principles (the Tennessee Debanking Law),[2] and the Tennessee Debanking Law includes within its scope the business of insurance.[3] In the coming months it seems plausible that other states could follow Tennessee’s approach. As enacted, effective July 1, 2024, the Tennessee Debanking Law included two main components: (i) a banking prohibition on the use of certain criteria to determine eligibility for financial services offered by non-insurance financial institutions; and (ii) an insurance prohibition on making coverage or rating decisions solely based on similar criteria.
The first component of the Tennessee Debanking Law, the banking prohibition, was enacted through the creation of Tennessee Statutes Section 45-1-128, housed in the Banks and Financial Institutions Title of the Tennessee Code, and titled “Permissible Risk Factors for Analyzing Prospective Customers; Discriminatory Practices.” Subsection 45-1-128(c) creates a list of impermissible bases for cancelling or denying financial services (excerpted directly below). The prohibition applies to all “Financial Institutions,” which term includes: “a state or national bank, a savings and loan association, savings bank, credit union, industrial loan and thrift company, or mortgage lender that has more than one hundred billion dollars ($100,000,000,000) in assets.”
(c) A financial institution shall not deny or cancel its services to a person, or otherwise discriminate against a person in making available such services or in the terms or conditions of such services, on the basis of:
(1) The person’s political opinions, speech, or affiliations;
(2) Except as provided in subsection (b), the person’s religious beliefs, religious exercise, or religious affiliations;
(3) Any factor if it is not a quantitative, impartial, and risk-based standard, including any such factor related to the person’s business sector; or
(4) The use of a rating, scoring, analysis, tabulation, or action that considers a social credit score based on factors including:
(A) The person’s political opinions, speech, or affiliations;
(B) Except as provided in subsection (b), the person’s religious beliefs, religious exercise, or religious affiliations;
(C) The person’s lawful ownership of a firearm;
(D) The person’s engagement in the lawful manufacture, distribution, sale, purchase, or use of firearms or ammunition;
(E) The person’s engagement in the exploration, production, utilization, transportation, sale, or manufacture of fossil fuel-based energy, timber, mining, or agriculture;
(F) The person’s support of the state or federal government in combatting illegal immigration, drug trafficking, or human trafficking;
(G) The person’s engagement with, facilitation of, employment by, support of, business relationship with, representation of, or advocacy for any person described in this subsection (c); or
(H) The person’s failure to meet or commit to meet, or expected failure to meet, any of the following as long as such person is in compliance with applicable state or federal law:
(i) Environmental standards, including emissions standards, benchmarks, requirements, or disclosures;
(ii) Social governance standards, benchmarks, or requirements, including environmental or social justice;
(iii) Corporate board or company employment composition standards, benchmarks, requirements, or disclosures based on characteristics protected under title 4, chapter 21; or
(iv) Policies or procedures requiring or encouraging employee participation in social justice programming, including diversity, equity, or inclusion training.
The second component of the Tennessee Debanking Law, the insurance prohibition, was enacted through the creation of Tennessee Statutes Section 56-8-114, housed in the Unfair Competition and Unfair or Deceptive Practices Chapter of the Insurance Title, and titled “Prohibited Practices by Insurers for Current or Prospective Customers.” The provision is excerpted directly below. The structure of the provision is similar to the above-quoted list of prohibited criteria for banking, but excludes many of the particularized criteria (e.g., firearm ownership or manufacture, immigration issue support, advocacy for political organizations, failure to meet environmental, social, board composition compliance standards not otherwise required by law).[4] Rather, the insurance prohibition simply makes it an unfair trade practice to “refuse to insure, or charge a different rate to a person, solely on the basis of . . . the person’s political opinions, speech, or affiliations; or . . . religious beliefs . . .”
(a) Insurers shall make determinations about the provision of services based on an analysis of sound underwriting and actuarial principles related to actual or reasonably anticipated loss experience unique to each current or prospective customer and shall not engage in a practice described in subsection (b). This subsection (a) does not restrict an insurer that claims a religious purpose from making such determinations based on the current or prospective customer’s religious beliefs, religious exercise, or religious affiliations.
(b) Except as otherwise provided in subsection (a), an insurer shall not refuse to insure, or charge a different rate to a person, solely on the basis of:
(1) The person’s political opinions, speech, or affiliations; or
(2) The person’s religious beliefs, religious exercise, or religious affiliations.
(c) A violation of this section constitutes an unfair trade practice and is subject to the remedies as provided under this part.
The insurance prohibition is integrated into the broader insurance regulatory structure as a function of another addition, in this case a new Subsection 23 to Tennessee Code Section 56-8-104, which contains Tennessee’s list of unfair trade practices in the business of insurance. The new Subsection 23 adds “a violation of § 56-8-114” (which is the above-excerpted insurance prohibition).
In conclusion, it is hard to predict how the recent Executive Order on debanking will impact state-based legislation proposing similar prohibitions on insurance coverage and rating decisions and the extent to which such legislation would impact current compliance functions for insurers. However, it seems likely that the Tennessee Debanking Law would be used as a template for any such state-based endeavors.
[1] See the Executive Order and Fact Sheet, available at: https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/; https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-guarantees-fair-banking-for-all-americans/
[2] See 2024 Tennessee Laws Pub. Ch. 746 (H.B. 2100).
[3] See T. C. A. § 56-8-104(23) referencing T. C. A. § 56-8-114.
[4] Reference this linked redline showing the differences in prohibited criteria as between the relevant sections of the banking law and the insurance law: https://www.foley.com/wp-content/uploads/2025/08/Redline-of-TN-Banking-vs-Insurance.pdf
