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Questions persist for property/casualty insurers despite antitrust exemption

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The U.S. House of Representatives has passed legislation that would remove a key antitrust exemption for health insurers — a move that property/casualty industry stakeholders have expressed concern about even though they are exempted from the legislation.

On a 416-7 vote, the House on Wednesday approved H.R. 372, the Competitive Health Insurance Reform Act of 2017. The bill would repeal the antitrust exemption featured in the McCarran-Ferguson Act of 1945 for the health insurance sector. The strong bipartisan support for the legislation in the House could bode well for Senate action, but the legislation could also be tied into the broader debate over the Affordable Care Act. 

“There seems to be a strong sentiment that if you’re going to make the health insurance sector competitive, then something is going to have to give on the antitrust side,” said Stef Zielezienski, senior vice president and general counsel for the American Insurance Association in Washington. “My view is be careful what you wish for, because McCarran is all about striking the right balance between regulation and enforcement of the antitrust policy by the Department of Justice and through the courts. If you start monkeying around with that balance, it could throw it out of whack to the detriment of competition and consumers.” 

But the legislation does preserve the antitrust exemption for auto and property insurance, including workers compensation.

“We’re about as protected from an antitrust repeal as we could get on the House side in the property/casualty,” he said. 

The bill also includes language specifying that if a line is classified as property/casualty under state law, Congress will defer to that classification, Mr. Zielezienski said. 

“Of course, that reinforces the primacy of state insurance regulation and ensures how the line is regulated under state law is what prevails,” he said.

Questions will still be raised about new and existing insurance products that have a medical component and whether those products fall into the health insurance category, Mr. Zielezienski said.