FTC Study Bill Heads Toward Showdown

The version that may come to the floor next week would not include language protecting joint industry activities such as compilation of historic loss data, according to industry officials and congressional staffers. In 2009, the House passed antitrust repeal legislation that did provide protection for some types of joint industry activities.

The chief supporters of the latest bill are Rep. Pete DeFazio, D-Ore.., and Rep. Louise Slaughter, D-N.Y. Another supporter is Rep. John Garamendi, D-Calif., a new member of Congress and former state insurance commissioner.

The effort to get the antitrust repeal bill to the House floor is part of a push by House Speaker Nancy Pelosi, D-Calif., to pass health reform proposals one at a time, rather than combined into a big package.

Life and health insurance industry groups appear to be united in opposition to the latest antitrust repeal proposal.

"There is a lot of misunderstanding about what the McCarran-Ferguson Act does and does not allow," says Robert Zirkelbach, a spokesman for America's Health Insurance Plans, Washington. "This act has nothing to do with competition in the health insurance market."

AHIP has sent a letter to Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, stating that bills seeking to repeal McCarran-Ferguson represent an "attempt to remedy a problem that does not exist."

Tom Currey, president of the National Association of Insurance and Financial Advisors, Falls Church, Va., says NAIFA supports the current "very limited federal antitrust law exemption" granted to the "business of insurance" by McCarran-Ferguson.

"We also support amendments added to the FTC Act in 1980 that barred the Federal Trade Commission from in effect becoming a federal regulator of insurance," Currey says. "The primary regulators of insurance reside at the state level."

Giving the FTC partial consumer protection authority over of the insurance industry "could be extremely destructive of the states' ability to exercise their first obligation to consumers–maintaining the solvency of insurance companies and their claims-paying ability," Currey says.

The American Council of Life Insurers, Washington, believes that "any changes to the McCarran-Ferguson Act should be considered only in the context of overall insurance regulatory reform," says Steve Brostoff, an ACLI representative.

The Council of Insurance Agents and Brokers, Washington, also wants to see Congress look at the antitrust exemption in the context of overall regulatory reform.

If the bill does go to the House floor, that will be "reminiscent of the cap-and-trade vote last year," says Nicole Allen, a CIAB vice president.

Rank-and-file House Democrats "may be asked to walk the plank on a measure that won't be signed into law, and wouldn't accomplish its stated aims even if it was accepted by the Senate," Allen says. "For those of us who philosophically support the Optional Federal Charter, we're long on record as saying we would commensurately accept changes in the McCarran-Ferguson Act. But this is all of the downside with none of the regulatory upside."

Because the bill would be so troubling, "we would expect to see a very united insurance industry, and any such potential vote would be a major, not minor, interest to all of us," Allen says.