The National Association of Insurance and Financial Advisors and the American Council of Life Insurers are poring over the new Antitrust Modernization Commission report.
The report, released Tuesday, recommends that Congress consider eliminating insurers’ limited antitrust exemption under McCarran-Ferguson, arguing that recent trends point to the benefit of ending such arrangements.
But Michael Kerley, a senior vice president at NAIFA, says the commission report “buttresses our position that the McCarran-Ferguson Act should be retained as is.”
One section of the report states, “No statutory change is recommended to the current role of the states in non-merger civil antitrust enforcement.”
“NAIFA thinks this recommendation is critical, because the report otherwise fails to differentiate in any way between naked exemptions from the antitrust laws–like the major league baseball exemption, for example–and the McCarran-Ferguson-type exemption, which applies only to the extent that the states are actively regulating the insurance-related conduct,” Kerley says.
The McCarran-Ferguson Act “does not really function as a true exemption to the federal antitrust laws,” Kerley says.
Instead, he says, the law dictates that state insurance regulators “are the appropriate arbiters of what is permissible conduct in this context, and they are able to ground that determination in their overall regulatory scheme based on their unique expertise in regulating the industry.”
If the state regulatory authority is to truly be preserved as recommended under Recommendation 32, “then the logical conclusion is that McCarran should be preserved,” Kerley says.
At the ACLI, ACLI spokesman Whit Cornman says any review of McCarran-Ferguson should be undertaken by Congress only “as part of a broader discussion regarding insurance regulatory reform and modernization and an optional federal charter…. We continue to believe that a discussion of McCarran-Ferguson belongs as part of a broader discussion regarding insurance regulatory reform and modernization and an optional federal charter.”