McCarran-Ferguson
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Recent News
Senate Majority Leader Harry Reid (D-Nev.), a co-sponsor of a bill to repeal the 1945 McCarran-Ferguson law, appeared as a witness at a hearing on the legislation before the Senate Judiciary Committee recently. In addition, President Obama mentioned the repeal in Saturday, Oct. 17, morning radio message to the nation. A number of senators at the Judiciary hearing expressed support for the exemption's repeal, including Sens. Charles Schumer (D-N.Y.) and Russ Feingold (D-Wis.). Christine Varney, the assistant attorney general in the Justice Department's Antitrust Division, also said at the hearing that Justice "generally supports the idea of repealing antitrust exemptions." The ADA sent two action alerts to members, one aimed at getting members to write to their senators, and the other to write to their representatives on the Judiciary Committee.
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Letters and Testimony
- Request to Rep. John Conyers (D-Mich.) to testify before house committee | PDF file/64k
- Request to Sen. Patrick Leahy (D-Vt.) to testify before senate committee | PDF file/68k
- Letter of support to Sen. Leahy (September 2009) | PDF file/95k
- Sen. Leahy urging him to reintroduce anti-trust legislation (June 2009) | PDF file/41k
At Issue
In 1945, Congress passed the McCarran-Ferguson Act to clarify that states could continue to regulate and tax insurers—giving the insurance industry a limited exemption from federal antitrust laws. To be exempt from federal antitrust laws—activities must meet all three of these tests:
- The activities must constitute the “business of insurance.” These activities are generally unique to the insurance business or whose primary impact is on the insurance market. Some examples include cooperative ratemaking and related functions, such as fixing the rates of various insurance pursuant to a joint agreement, classifying risks, and refusing to offer certain types of coverage. However, the business of insurance would NOT include agreements between insurers and medical practitioners to provide services.
- The activities must be “regulated by state law.” An insurer must be subject to general regulatory standards at the state level but the exemption does not depend on the quality of the regulations or the effectiveness of state oversight.
- The activities must not constitute “an agreement to boycott, coerce, or intimidate, or [an] act of boycott, coercion, or intimidation.”
- McCarran-Ferguson Act Exemption for Insurance Companies Fact Card | PDF file/266k
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Contact Us
For additional information, please contact:
- Tom Spangler, Director, Legislative & Regulatory Policy, Federal Affairs
Federal Affairs
1111 14th Street NW, Suite 1100
Washington, DC 20005
202-898-2400
Fax: 202-898-2437
E-mail: govtpol@ada.org
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