Podcast Center
Video Center
Webcasts
Resource Center
Events
April 03, 2007 at 11:12 AM
A federal commission recommended today that Congress consider eliminating insurers’ limited antitrust exemption, saying recent trends argue for ending such arrangements.
The recommendation was contained in the report of the Antitrust Modernization Commission. Four of the 12 commission members specifically called for repeal of the McCarran-Ferguson Act and 3 other antitrust exemptions: the Shipping Act, the Export Trading Company Act and the Webb-Pomerene exemption.
One member, John Shenefield, a lawyer at Morgan Lewis, Washington, said repeal of those exemptions “should not be delayed.” Shenefield was in charge of antitrust enforcement in the Carter administration,
The commission dismissed in its report the potential effect on small insurers of eliminating the exemption that allows them to collect and share loss data.
“Like all potentially beneficial competitor collaboration generally … such data sharing would be assessed by antitrust enforcers and the courts under a rule-of-reason analysis that would fully consider the potential pro-competitive effects of such conduct and condemn it only if, on balance, it was anticompetitive.”
Insurers would bear no greater risk than companies in other industries undertaking data sharing and other collaborative efforts, the commission added. “To the extent that insurance companies engage in anticompetitive collusion, however, then they appropriately would be subject to antitrust liability,” the group stated.
Various factors have driven the movement toward deregulation, the report said, noting that technological progress has facilitated the growth of competition in “industries previously considered natural monopolies.”
