As Connecticut Attorney General Richard Blumenthal and collision repairers take aim at property-casualty insurers by seeking a repeal of their anti-trust exemptions under the McCarran-Ferguson Act (click HERE for story), one legislator is also now striving to do the same in the health and medical malpractice world.

U.S. Senate Judiciary Committee Chair Patrick Leahy (D-Vt.) recently rolled out legislation, the Health Insurance Industry Antitrust Enforcement Act, that would repeal antitrust exemptions under the McCarran-Ferguson Act for these health and medical malpractice insurers.

In repealing the exemption, the bill would give the Department of Justice and the Federal Trade Commission (FTC) the authority to apply antitrust laws to anticompetitive behavior, such as price-fixing, by insurance companies but would not affect the ability of each state to regulate the business of insurance. Insurers have been exempt from anti-trust laws since the passing of the McCarran-Ferguson Act in 1945.

Leahy says that taking away such exemptions could lead to increased competition among insurers.

"We should not lose sight of the fact that the health insurance industry currently does not have to play by the same good-competition rules as other industries," Leahy said. "That is wrong, and this legislation corrects it."

The Automotive Service Association says that repealing the McCarran-Ferguson act for the property-casualty side is important because state insurance regulators “lag in addressing important consumer and small-business property and casualty issues” such as steering, pushes for aftermarket parts use and paint capping.

When the Insurance Industry Competition Act was introduced in March, David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI), said PCI believes the bill takes advantage of last year’s AIG controversy to punish the entire insurance industry.

“The McCarran-Ferguson Act does not hinder competition among insurers,” Sampson said. “In fact, it promotes competition in the marketplace by putting small and medium-sized companies on a level playing field with much larger competitors, and it creates efficiencies for insurers that mean savings and choice for insurance buyers. These savings are crucial to consumers during an economic downturn, and we call upon Congress to reject this misguided legislation.”