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November 16, 2004 at 07:00 PM
At least one member of Congress is questioning the insurance industry’s exemption from federal anti-trust laws.[@@]
Sen. Peter Fitzgerald, R-Ill., the senator who convened today’s hearing on insurance brokerage compensation, says one result of the investigations should be a fresh look at the section of the McCarran-Ferguson Act that created the anti-trust exemption.
“The system of state regulation has worked well for many purposes,” Fitzgerald, chairman of the financial management subcommittee of the Senate Governmental Affairs Committee, said at the insurance brokerage hearing.
But Fitzgerald, whose subcommittee held the hearing, said that state regulators may have trouble detecting abuses of market power and that anti-trust provisions are needed most in industries with high market concentrations. He noted that the 2 largest insurance brokerages control about 70% of the market for large commercial insurance policies.
“I believe it is time to revisit the antitrust exemption of the McCarran-Ferguson Act,” Fitzgerald said.
Vigorous federal anti-trust enforcement should help discourage the kind of anti-competitive conduct that New York Attorney General Eliot Spitzer is attacking, Fitzgerald said.
