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Life Health > Health Insurance > Health Insurance

Insurance Groups Slam FTC Authority Expansion

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WASHINGTON BUREAU — Ten life, health and property-casualty insurance industry trade groups have signed a letter opposing an H.R. 3962 provision that would let the Federal Trade Commission prepare studies and reports on the entire insurance industry.

The provision is included in a manager’s amendment added to H.R. 3962, the Affordable Health Care for America Act bill, by Rep. John Dingell, D-Mich., chairman emeritus of the House Energy and Commerce Committee.

The House passed the AHCAA bill Saturday by a 220-215 vote.

In addition to the FTC authority provision, the bill includes a provision that would repeal the antitrust protection accorded health and medical malpractice insurers by the McCarran-Ferguson Act.

In the letter, insurance groups take a stance similar to the position they took in 2007, when Sens. Patrick Leahy, D-Vt., Arlen Specter, D-Pa., and Trent Lott, R-Miss., introduced a McCarran-Ferguson Act exemption repeal bill. The senators introduced the bill in reaction to complaints by consumers and businesses in Louisiana and Mississippi that insurers were not paying claims related to Hurricane Katrina and Hurricane Rita in a timely fashion.

“As the bill’s title implies, its goal should be to address issues of health care coverage and affordability,” insurance groups write in the new FTC provision letter. “This purpose is not served by allowing the FTC to investigate all lines of insurance (which is the job of state insurance regulators). It is also not served by limiting the protections the McCarran-Ferguson Act provides for pro-competitive insurance activities that are subject to scrutiny by state insurance regulators, especially those that facilitate greater market access by medical malpractice insurers.”

The Dingell amendment expands FTC authority over insurance by deleting the term “the business of” and leaving only the word “insurance,” the insurance groups write.

“This amendment would not even limit the FTC’s authority to activities that have been found by the courts to be a part of the ‘business of insurance,’ but would instead vest the FTC with unfettered discretion to conduct investigations of virtually anything that falls within the term ‘insurance’ in any line,” the insurance groups write.

The letter was sent Friday to all members of the House.

Robert Hunter, a director at the Consumer Federation of America, Washington, said he supports the H.R. 3962 FTC provision.

“Why shouldn’t the government be allowed to study insurance?” he asked. “It is one of the largest businesses in the country…. I think the government would be foolish not to know what is going on in insurance; look at American International Group. There are things going on in the insurance industry that could harm the entire economy.”

For other health bill coverage, please look at these stories:


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