You are here:HomeIssuesProtecting State Insurance Regulation 2010Vote On McCarran Repeal Delayed

Vote On McCarran Repeal Delayed

One of the things up in the air as a result of the D.C. snowstorms is the schedule of Congress. Both the House and Senate...
February 12, 2010

One of the things up in the air as a result of the D.C. snowstorms is the schedule of Congress. Both the House and Senate were scheduled to be in session this week but so far, the House hasn't met and the Senate has only had pro-forma sessions. This is the week the House is supposed to debate a bill that would repeal a portion of the McCarran-Ferguson Act as it applies to healthcare 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.

The move to repeal McCarran-Ferguson for healthcare and medical malpractice insurers is a political exercise that is directly related to the stalled effort to pass comprehensive healthcare reform. While the healthcare reform bills are stalled and Democrats appear to be in disarray as to how to proceed following the loss of their filibuster-proof majority in the Senate, the McCarran-Ferguson repeal effort is seen by them as an element of healthcare reform that can be passed. This, despite the fact that prospects for a repeal appear dim in the Senate.

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 affirms primary insurance regulation to the states.

PIA National has prepared a Grassroots Action Alert, which we will issue along with a press release once a vote is scheduled in the House. At that time, we will be asking PIA members to respond on fairly short notice to contact your House members and urge them to vote against this bill.

PIA National has posted an Instant Update video on YouTube and in the PIA National Streaming Media Center with background on the effort to repeal a portion of McCarran-Ferguson.

In addition, PIA National has prepared a paper, PIA National Briefing: McCarran-Ferguson and Insurance. It is an analysis of how McCarran-Ferguson works. This paper is intended primarily for policymakers, regulators and congressional staffers.

PIA National Briefing: McCarran-Ferguson and Insurance (2/3/10)

PIA National Instant Update Video (YouTube)