WASHINGTON—A sometimes passionate Senate hearing on insurance regulation before the Senate Commerce, Science and Transportation Committee is unlikely to be the last word on the subject, industry observers say.

The last word concerning insurance regulatory issues--including possible repeal of the insurance industry's limited exemption from federal antitrust law--likely will be uttered in another venue because the Commerce Committee's jurisdiction over insurance matters is limited, they say. Instead, last week's Commerce Committee hearing provided lawmakers and others dissatisfied with insurance industry practices with a public forum.

And witnesses before the committee aired their complaints, particularly regarding claims-handling practices in the wake of Hurricane Katrina.

States are unable "to properly regulate" the insurance industry, said Mississippi Attorney General Jim Hood. Insurers have tried to intimidate state governments, and should be subject to federal regulation, he said. "Take away their antitrust exemption and license them at the federal level," said Mr. Hood, who has sued insurers for their claims-handling practices.

Insurers should be stripped of the limited exemption from federal antitrust laws that they have under the McCarran-Ferguson Act, agreed Robert Hunter, director-insurance for the Washington-based Consumer Federation of America. He also called on the committee to allow the Federal Trade Commission to examine insurers' allegedly unfair claims practices. "Consumer groups do not care who regulates insurance," he said. They simply want "excellent" regulation, whether at the state or federal level.

Sen. Trent Lott, R-Miss., called insurer behavior "outrageous" as well as "arrogant and mean-spirited." Sen. Lott, who is co-sponsoring legislation that would repeal the McCarran-Ferguson exemption, added that insurers "may have a surprise coming."

Sen. Mark Pryor, D-Ark., who presided over the hearing, noted that insurance trade groups had been invited to testify. None, however, accepted the invitation, in part because of scheduling conflicts and "some felt this might be an unfriendly venue for them--which is unfortunate," he said.

The committee also heard testimony in favor of a measure that would require insurers to provide consumer access to data on severely damaged, stolen or flooded vehicles that had been written off as total losses but that have, nonetheless, been refurbished and resold to unsuspecting buyers by unscrupulous dealers. That bill also was introduced by Sen. Lott.

The practical impact of last week's hearing remains unclear because of jurisdictional issues, industry observers said.

"I think the Banking Committee really has jurisdiction over virtually all insurance issues, but there may be some fringe areas where the Commerce Committee can legislate, such as the used car dealers issue we saw," said Ben McKay, senior vp in the Property Casualty Insurers Assn. of America's Washington office. "They could legislate another layer of bureaucracy on top of the private sector, but they don't have jurisdiction to fix the current system, which is what really needs to be done."

"While there have been murky issues in the past about jurisdiction, everyone in our community has acknowledged the primacy of the Senate Banking Committee as the principal venue for insurance regulatory issues," said Joel Wood, senior vp of the Council of Insurance Agents & Brokers in Washington. "No one's going to argue that that means that the Commerce Committee can't hold a hearing such as they did."

"They do have jurisdiction over one of the bills Sen. Lott has sponsored," said Melissa Shelk, vp with the American Insurance Assn. in Washington in reference to the auto identification bill. "It provides the opportunity to look at other issues that Sen. Lott and others have interest in with regard to the industry," she said.

"This was clearly an attempt to allow Sen. Lott and the other members who are concerned to express frustration with the insurance industry," said Julie Gackenbach, a Washington-based consultant for the National Assn. of Mutual Insurance Cos. "I expect to see continued discussions and hearings, but any legislative action I think will probably occur in other committees."

"To the extent that this issue is worked out, it will primarily be a Banking Committee and Judiciary Committee issue," Ms. Gackenbach said.