The National Association of Insurance Commissioners implored Congress last week to consider amendments to the antitrust exemption insurers have under the McCarran-Ferguson Act and initiatives to create an optional federal charter as “separate and distinct” policy matters.
But the American Council of Life Insurers later issued a statement opposing the NAIC position, saying the 2 issues should be addressed in tandem.
The NAIC’s position was voiced in testimony before the Senate Judiciary Committee by Susan Voss, Iowa insurance commissioner.
She appeared on a panel of citizens, consumer advocates and a representative of the property-casualty insurance industry discussing “The McCarran-Ferguson Act: Implications of Repealing the Insurers’ Antitrust Exemption.”
In her testimony, Voss said the NAIC opposed coupling McCarran-Ferguson repeal with creation of an optional federal charter.
“While some of the industry’s largest players advocate for deregulation through a so-called federal charter and would encourage coupling the 2 issues, the NAIC supports reconsideration of the limited federal antitrust exemption as a separate and distinct policy matter.”
But in a statement issued after the hearing, Jack Dolan, an ACLI spokesman, said, “Repealing McCarran-Ferguson in isolation, without regard to comprehensive regulatory reform in the form of an optional federal charter, would make an already inefficient regulatory system far worse.”
He added that the ACLI “supports optional federal chartering because the current state regulatory system is cumbersome, inconsistent, unnecessarily complicated and unable to adapt quickly to changes in the marketplace.”
But the movement from exclusive state regulation to an optional federal system must be accomplished in an orderly way, Dolan said. “Repeal of McCarran-Ferguson outside the context of optional federal chartering would have the opposite effect.”
The hearing was convened by Sens. Patrick Leahy, D-Vt., and Arlen Specter, R-Pa., the chairman and ranking minority member of the Judiciary panel.
They are among the sponsors of S. 618, “The Insurance Industry Competition Act of 2007,” which seeks to subject the industry to antitrust scrutiny from both the Department of Justice and the Federal Trade Commission.