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House Democrats Plan Vote on McCarran-Ferguson Repeal

House Democrats are planning a vote as early as next week on legislation that would repeal the McCarran-Ferguson Act anti-trust laws exemption for health care...
February 2, 2010

House Democrats are planning a vote as early as next week on legislation that would repeal the McCarran-Ferguson Act anti-trust laws exemption for health care and medical malpractice insurers. The bill could also give the Federal Trade Commission the authority to prepare studies and reports on the entire insurance industry.

But it is not certain if the bill comes up in the House that it could pass. In fact, some industry lobbyists think that a vote may not be taken if there aren't sufficient votes to pass it.

In the Senate, Majority Leader Harry Reid of Nevada is a big supporter of repealing the antitrust exemption. But there are strong opponents, including Senator Ben Nelson (D-Neb.), who is a former governor, state insurance commissioner, NAIC president and insurance company executive.

Background: The limited antitrust exemption under McCarran-Ferguson allows insurers to pool historic loss information so that they are better able to project future losses and charge an actuarially based price for their products. It also allows for joint development of policy forms. The act does not exempt insurers from state antitrust laws, which explicitly prohibit insurers (and all businesses), from conspiring to fix prices or otherwise restrict competition. The McCarran-Ferguson Act in no way results in any kind of restraint on competition. It also gives primary insurance regulation to the states.

What It Means to Agents:  Much of the insurance industry is united in opposition to this proposal. PIA is actively involved in an industry coalition that has been meeting several times a week to coordinate strategy. On Friday January 29, the coalition sent a letter to every member of Congress.

PIA National is preparing a Grassroots Action alert, which will be issued to PIA members once a vote is scheduled. At that time, you will be asked on fairly short notice to contact your House members and urge them to vote against this proposal.

Coalition Letter (1/29/10)