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March 18, 2009 at 08:00 PM
Two House Democrats have introduced a bill that would repeal the McCarran-Ferguson Act insurance industry antitrust exemption.
The bill, H.R. 1583, the Insurance Industry Competition Act, would give the U.S. Department of Justice and the Federal Trade Commission the authority to apply antitrust laws to anticompetitive behavior by insurance companies.
The bill would keep the McCarran-Ferguson provision that puts jurisdiction over insurance regulation in the hands of the states.
The bill was introduced by Reps. Gene Taylor, D-Miss., and Peter DeFazio D-Ore.
Taylor and DeFazio have introduced similar bills in earlier Congresses. They say the controversy over bonuses paid to American International Group Inc., New York, employees highlights the need for action on the antitrust issue.
The current insurance industry antitrust exemption gave AIG a free pass to become “too big to fail,” and “now the U.S taxpayers are on the hook to bail them out or risk even further turmoil in an already fragile economy,” Taylor and DeFazio say in a statement. “This legislation would close that exemption.”
