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Life Health > Life Insurance

Judge Considers Insurance Data Antitrust Case

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NU Online News Service, March 19, 7:05 p.m. – A federal judge in New York says a group of life insurance companies might be violating antitrust laws if it claims to have the exclusive right to use a collection of study data.

The plaintiff in the case, Intellective Inc., a consulting firm, has sued a group of five life insurers and two consulting firms that have run the Intercompany Investment Performance Study, a U.S. life insurance investment performance survey, since 1993, according to court documents.

Intellective helped the group analyze the data from 1996 to 1999. The group then denied Intellective the right to use the data, after it replaced Intellective with another consulting firm.

Intellective’s suit accuses the defendants of violating federal and state antitrust laws by keeping it from conducting its own life insurance investment performance surveys.

The defendants asked the judge, U.S. District Court Judge Alvin Hellerstein, to dismiss the suit, arguing that Intellective has no case, in part because the working group represents a group of data customers, not suppliers, and in part because the working group is keeping Intellective from doing only one specific type of research.

Intellective has “alleged a market that is so narrow as to fall within the ?strange red-haired, bearded, one-eyed man-with-a-limp classification’ rejected by courts as a matter of law,” according to Hellerstein’s summary of the defendants’ argument.

Hellerstein dismissed the charges against the consulting firms, but he kept the antitrust allegations against the insurance companies.

“Intellective adequately states an antitrust injury,” Hellerstein writes in an opinion discussing his ruling. “Intellective alleges that it, and all others, are prevented from competing in the relevant market by the Working Group’s control of the data necessary to perform a competing study. The prevention of this type of marketwide competition is an ?injury of the type antitrust laws were designed to prevent.’”

Hellerstein expresses uncertainty how he should go about analyzing the insurance investment data market.

“This case presents an unusual product and unusual market,” Hellerstein writes. “The data upon which the Working Group’s investment analysis is made is valuable only because it reflects a composite of insurance companies.”

Pinning the epithet of “monopolists” on the Working Group members is difficult, because, if the companies had not bothered to collect the data, there would be no value and no product, Hellerstein writes.

The final analysis of Intellective’s definition of its market will depend on the evidence and the economic analyses the parties present, Hellerstein writes.

Hellerstein’s ruling and opinion deal only with whether Intellective has stated a basis for bringing its case to court, and not with the merits of Intellective’s claims.

The defendants still in the case are Massachusetts Life Insurance Company, Springfield, Mass.; John Hancock Life Insurance Company, Boston; Principal Life Insurance Company, Des Moines, Iowa; an affiliate of CIGNA Corp., Philadelphia; and Nationwide Mutual Insurance Company, Columbus, Ohio.

The two consulting firms dismissed as defendants are PricewaterhouseCoopers L.L.P., New York, and Sagamore Advisors.

Representatives for six of the defendants were not immediately available for comment. A spokesman for Nationwide declined to comment.

Jeffrey Slade, a New York lawyer who represents Intellective, welcomed the ruling.

“We do not expect an appeal, because no appeal is permitted from this kind of decision,” Slade says.


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