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FOR IMMEDIATE RELEASE NAIC TESTIFIES BEFORE SENATE COMMITTEE ON
MCCARRAN-FERGUSON EXEMPTION WASHINGTON, D.C. (March 7, 2007) - Speaking on behalf of the National Association of Insurance Commissioners (NAIC), Iowa Insurance Commissioner Susan Voss testified today before the Senate Judiciary Committee on consumer protection and the McCarran-Ferguson exemption. During her testimony, Voss delivered the message that the NAIC supports the intent of Congress to protect consumers by enabling federal investigation and prosecution of bad actors that use the McCarran-Ferguson Act's limited exemption for insurance as a shield from federal antitrust law. "State experience with the business of insurance is long-standing," Voss said. "Existing state consumer protection, antitrust and unfair trade practice laws provide necessary tools to help stop anti-competitive conduct. Any federal legislation should include provisions that authorize federal-state collaboration to identify, investigate and prosecute bad actors who engage in anti-competitive practices in the business of insurance. We believe this issue invites cooperative federalism to protect consumers." The Senate Judiciary hearing explored the possible implications of a repeal of the limited federal antitrust exemption for insurance. The repeal is called for under S. 618, the Insurance Industry Competition Act of 2007, sponsored by Senate Judiciary Chair Patrick Leahy (D-VT), Ranking Member Arlen Specter (R-PA), Majority Leader Harry Reid (D-NV), Minority Whip Trent Lott (R-MS), and Sen. Mary Landrieu (D-LA). Voss added that identifying the bad acts that Congress is trying to reach should be the first step in the consideration of the proposed repeal, followed by a review of the existing state and federal tools available to combat those acts. Voss explained in her testimony that outright repeal of the McCarran-Ferguson exemption risks creating unintended consequences by threatening state-regulated, pro-competitive collaborative activities among insurers. "Certain insurance practices, which are in place to help consumers and promote competitive and strong markets, are at risk if the Act is repealed," she said. She said such practices include loss-cost data sharing, state insolvency funds, joint policy forms and standardized-risk classifications, joint underwriting and residual market mechanisms, and the operation of ratings organizations. Voss concluded her testimony by emphasizing the willingness of the NAIC and its Members to work with the Judiciary Committee and the 110th Congress to examine "whether a targeted boost in existing federal enforcement power against bad actors in certain alleged anti-competitive activities would complement strong state regulatory authority - not compete against it." Click HERE to view the entire testimony.
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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©2007 National Association of Insurance Commissioners. All rights reserved. | ||
