NAMIC: House Hearing Considers Report’s Recommendations on Antitrust Exemption

The House Judiciary Committee today will hold a hearing in response to the recent report released by the Antitrust Modernization Commission. The panel spent the past three years exploring issues related to insurance, including a review of specific exemptions and immunities. Among the issues considered by the panel was the antitrust exemption allowed for insurers under the McCarran-Ferguson Act. While not specifically recommending the Act be repealed, the commission suggested that Congress carefully review all exemptions with an eye toward reducing their number and scope.

In its strongly worded response to the report, NAMIC underscored the importance of the Act to the insurance industry, especially to smaller and medium-sized companies.

"For the Commission to argue that the McCarran-Ferguson exemption allows insurers to engage in anticompetitive actions is to ignore the extensive regulatory oversight and enforcement exercised by state insurance regulators and state attorneys general," NAMIC wrote. "The limited federal antitrust immunity provided by the McCarran-Ferguson Act serves to make the industry more, not less, competitive."

The NAMIC analysis also explained that many studies over the years, including those conducted by the U.S. Department of Justice, state insurance departments, economists, and academics have consistently concluded that the insurance industry is very competitive under classic economic tests.

"If the Commission had engaged in a full analysis of the insurance industry, it would have discovered that the very exemption they criticize facilitates a vibrant competitive market, spurs product innovation, and promotes competitive, appropriate pricing and protects consumer welfare," NAMIC wrote.

Direct questions to NAMIC’s Senior Director of Federal Affairs Marliss Browder.

Posted: Tuesday, May 08, 2007 12:00:00 AM. Modified: Tuesday, May 08, 2007 2:42:37 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.