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Member, Beacon International Group, Ltd.
WASHINGTONBills that would repeal the insurance industry's limited federal antitrust exemption were introduced in both the House and Senate Thursday.
The bipartisan measures, called the Insurance Industry Competition Act in both chambers, would retain state regulation of insurance while giving the federal Justice Department and the Federal Trade Commission the authority to apply antitrust laws to insurance companies. The McCarran-Ferguson Act of 1945 granted insurers a limited exemption from federal antitrust laws.
"The insurance industry, like Major League Baseball, is exempt from federal antitrust laws," the House bill's chief sponsorRep. Peter DeFazio, D-Ore. said in statement accompanying introduction of the bill. "But the insurance industry, unlike Major League Baseball, has a direct impact on the life, health, safety and economic security of all American families. There is no justification for the insurance industry to be exempt from federal anti-trust laws."
The Des Plaines, Ill.-based Property Casualty Insurers Assn. of America issued a statement opposing the change.
PCI stressed that the act's exemption is limited, and that insurers remain subject to laws relating to boycott, coercion and intimidation. "Under McCarran, statistical agents can collect and validate data, and insurance companies can pool and use aggregated loss data, which is not a form of price fixing," said PCI in its statement. PCI said changes in the law would hurt small insurers and "have a chilling effect on the ability of existing insurers of all sizes to expand into new markets or new product lines."