Insular Areas Policy Act

Title I: Findings, Purposes, and Policy - Insular Areas Policy Act - Declares that it is Federal Government policy to promote the self-determined political, social, and economic development of the insular areas and to recognize their unique character in the extension of Federal laws, programs, and regulations.

Title II: Council on Insular Affairs - Establishes a Council on Insular Affairs to exercise certain authorities with respect to the insular areas on behalf of the President.

Directs the Council to report annually on the state of the insular areas to the House Committee on Interior and Insular Affairs and the Senate Committee on Energy and Natural Resources. Requires the report to indicate the social, economic, and political conditions of such areas and to detail changes in those conditions as well as actions to address such conditions.

Abolishes the Office of Territorial and International Affairs and establishes the Office of Insular Assistance within the Department of the Interior to assume responsibilities regarding the administration of grants to territorial governments.

Authorizes appropriations.