Bill Would Subject Insurers to Anti-Trust Laws - BodyShop Business

Bill Would Subject Insurers to Anti-Trust Laws

The U.S. House of Representatives is considering a bill that would
remove the federal antitrust exemption from the insurance industry.

In repealing the exemption, the Insurance Industry Competition Act
would give the Department of Justice and the Federal Trade Commission
(FTC) the authority to apply antitrust laws to anticompetitive behavior
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.

The bill’s sponsors – Rep. Gene Taylor, D-Miss., and Rep. Peter DeFazio, D-Ore. –
say insurers’ exemption from anti-trust laws is what allowed American
International Group (AIG) to become “too big to fail” and that insurers
believe they’re “above the law.”

“The fact that the insurance industry is exempt from federal anti-trust
laws is outrageous,” DeFazio said. “Shouldn’t the $170 billion bailout
of AIG be the third and final strike to the ‘business as usual’
attitude toward the insurance industry?”

David A. Sampson, president and CEO of the Property Casualty Insurers
Association of America (PCI), said the group opposes the Insurance
Industry Competition Act, which PCI believes takes advantage of the 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.”

Click HERE to download the bill.

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