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FOR IMMEDIATE RELEASE
NAIC TELLS SENATE
COMMITTEE THAT KANSAS CITY, MO (June 20, 2006) - Speaking on behalf of the National Association of Insurance Commissioners (NAIC), Illinois Director of Insurance Michael McRaith told the U.S. Senate Committee on the Judiciary today that the McCarran-Ferguson antitrust exemption, in concert with effective state insurance supervision, fosters a vibrant, competitive insurance marketplace, and cautioned against its repeal. "The 'business of insurance' exemption in McCarran-Ferguson authorizes insurers to engage in supervised, but cooperative, activities that promote competition, enhance consumer choice, and help maintain marketplace integrity," McRaith said to the Senate Committee. "Its repeal would not improve the affordability, reliability or availability of insurance to consumers, but rather inject uncertainty, reduce stability and predictability, deter capital infusions, and ultimately harm competition and raise costs." McRaith emphasized state insurance officials' core priority of protecting consumers, and highlighted the unique characteristics of insurance, which make analogies to other financial sector products inherently misleading. Additionally, he shared insurance commissioners' concerns regarding recently introduced legislation to establish an untested, industry-funded federal insurance regulator and allow insurance companies to opt out of "cradle-to-grave" state consumer protection. "The creation of a massive new federal bureaucracy to benefit a small segment of the largest carriers in the insurance industry - at the expense of consumers - is an idea that this Committee and the U.S. Congress should unequivocally reject," McRaith said. The Director also shared with the Committee the extensive work of the NAIC Broker Activities Task Force, which he chairs, to address allegations of bid-rigging and other anti-competitive practices. McRaith showcased the NAIC's three-pronged national plan of action: to promote broker compensation transparency, to coordinate multi-state investigations of brokers' and insurers' business practices, and to ease the process of providing anonymous "tips" to alert insurance officials of unlawful or unscrupulous behavior. "NAIC members have worked on these issues with attorneys general from around the nation, and have guided resolutions that have returned more than $1 billion to policyholders and imposed business reforms that prioritize consumer protections," McRaith said. "The NAIC looks forward to continued work with federal and state officials, consumers, large and small industry participants, and other interested parties to prevent and punish anti-competitive practices."
About the NAIC About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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