Several Senate leaders joined Thursday to introduce a bill that could expose insurers to tougher antitrust scrutiny.
The bill, S. 618, “The Insurance Industry Competition Act of 2007,” would give the Federal Trade Commission and the Justice Department responsibility for making sure that insurance companies comply with federal antitrust laws.
“Federal oversight would provide confidence that the industry is not engaging in the most egregious forms of anti-competitive conduct, price-fixing, agreements not to pay and market allocations,” says Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, the lead sponsor of the bill.
Co-sponsors include Sen. Arlen Specter, R-Pa., the most senior Republican on the Senate Judiciary Committee; Senate Majority Leader Harry Reid, D-Nev.; and Sen. Trent Lott, R-Miss, the Senate minority whip, who has been a harsh critic of the way property-casualty insurers have handled claims resulting from Hurricane Katrina.
Lawmakers also have introduced a version of the antitrust bill in the House.
Leahy and Specter introduced an unsuccessful insurance industry antitrust bill in September 2006.
Property-casualty industry groups have condemned S. 618, but representatives from life groups were not immediately available for comment.
In the past, life groups have hinted at a willingness to trade the antitrust exemption for a uniform, national insurance regulatory system.
The McCarran-Ferguson Act, a bill passed in 1945, created a federal law that exempts the “business of insurance” from federal antitrust laws, to the extent that the business is regulated by the states.
Another section of the act gives states exclusive jurisdiction over the regulation of insurance, except in cases in which a federal law specifically addresses insurance regulation.