Posted on 20 Mar 2009
Legislation was introduced March 19 that would repeal the limited antitrust exemption granted the insurance industry under the McCarran-Ferguson Act. The "Insurance Industry Competition Act" introduced by Rep. Gene Taylor (D-Miss) and Peter DeFazio (D-OR) would allow federal authorities, including the Federal Trade Commission, to regulate the business of insurance – effectively supplanting existing state rating regulation that prohibits price-fixing agreements, protects policyholders against unsound rates and promotes competition among insurers.
The McCarran-Ferguson Act is good for consumers, says the Property Casualty Insurers (PCI). According to the PCI, the limited exemption that allows insurers to share loss data promotes competition in the marketplace by putting small and medium-sized companies on a level playing field with much larger competitors. It creates efficiencies for insurers that translate into savings and choice for insurance buyers. Repealing the exemption would create market disruptions in states that can least afford it, especially in recovering markets in coastal areas where small insurers are filling important availability gaps.