House Bill Would Remove Federal Anti-Trust Exemption from Insurance Industry
March 24, 2009
U.S. Congressman Gene Taylor (D-Miss.) and Peter DeFazio (D-Ore.) have
introduced a bill that would remove the federal anti-trust exemption from
the insurance industry. The act, called the Insurance Industry Competition
Act of 2009, would amend the McCarran-Ferguson Act. It would remove the
following language from the current law, "to the extent that such
business is not regulated by state law," and would replace it with,
"the Federal Trade Commission Act, as it relates to areas other than
unfair methods of competition, shall be applicable to the business of
insurance to the extent that such business is not regulated by State law."
The Insurance Industry Competition Act also would give the Department
of Justice and the Federal Trade Commission the authority to apply the
antitrust laws to anticompetitive behavior by insurance companies, while
leaving state laws regulating insurance intact.
Taylor says the legislation is particularly important in light of the
bailout of AIG Insurance.
"The fact that the insurance industry is exempt from federal anti-trust
laws is outrageous," Taylor says. "Shouldn't the $170 billion
bailout of AIG be the third and final strike to the 'business as usual'
attitude toward the insurance industry?"
He adds, "AIG was gambling with people's life savings and lost it
all to speculative and shady transactions and contributed to the current
crisis. We must ensure this never happens again."
A statement from Taylor's office says, if passed, this legislation could
affect the insurance industry in a variety of ways.
"If there ever had been, there no longer exists any justification
to exempt the insurance industry from federal government oversight,"
reads the statement. "Such oversight could ensure that the industry
does not engage in anticompetitive conduct like price fixing, agreements
not to pay, and divvying up geographical areas."
for full text of bill.
to visit the website of U.S. Congressman Gene Taylor (D-Miss.).
to visit the website of U.S. Congressman Peter DeFazio (D-Ore.).
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