WASHINGTON,D.C. — The American Insurance Association (AIA) will urge state insurance regulators to be more forceful in their support of the limited exemption from federal antitrust laws currently in the McCarran-Ferguson Act and their opposition to Congressional efforts to repeal that exemption, during the National Association of Insurance Commissioners (NAIC) meeting June 1-4 in San Francisco. “We are looking for strong confirmation that the NAIC is doing all it can to support McCarran’s antitrust provisions,” says AIA Vice President and Assistant General Counsel David Snyder. “Failure to do so will result in new federal layers of regulation on top of the existing state regulatory system, erosion of areas where insurers can compete in a free market environment and an uncertain legal climate. Such a result will be bad for consumers, insurers and state regulators.” The McCarran-Ferguson Act, approved by Congress in 1945, delegates authority to regulate the business of insurers to the states. McCarran creates a limited exemption from federal antitrust laws to the extent that the business of insurance – not the business of insurance companies – is regulated by the states. This limited exemption from federal antitrust laws is designed to prevent federal antitrust enforcement from undercutting insurance regulatory systems established by the states. “Both regulators and insurers have an interest in efficient and effective regulation, and they both should want to avoid duplicative, even potentially contradictory regulatory mandates from other agencies,” Snyder states. “While we have a reform agenda for the state regulatory system, as long as the states are designated regulators, then they should perform those functions without second-guessing by antitrust enforcers or consumer agencies. For this reason it’s important for the NAIC to speak clearly in support of McCarran-Ferguson’s limited antitrust exemption.” AIA states that it expects to continue to be engaged in discussions surrounding climate change. “We have worked with the NAIC as it has looked at the climate change issue and have summarized the environmentally friendly activities of insurers,” Snyder says. “However the recent course of action seems to be focused not on useful action, but on increased disclosures by insurers. These mandates could put insurers at odds with traditional regulatory concepts such as prudent investing. Insurers are not responsible for global warming, but increasingly realize that they can, if allowed to do so, send important signals about comparative risks,” states Snyder. For additional information, visit www.aiadc.org.
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