SAVANNAH, GA.–The effort to repeal insurers' anti-trust exemption under the McCarran-Ferguson Act in this congressional session remains “an answer in search of a problem,” according to a former insurance regulator.

Larry Mirel, former Washington, D.C. insurance commissioner, told a forum at the spring meeting here of the National Conference of Insurance Legislators that the repeal effort is driven by members of Congress whose states suffered devastating losses during Hurricane Katrina.

“People like to beat up on insurance companies,” he said. “Recently, critics of the insurance industry have pointed to the anti-trust exemption in the McCarran-Ferguson Act as one reason insurance companies, they claim, don't play fair.”

The landmark 1945 legislation gave states the authority to regulate the business of insurance and granted the industry an anti-trust exemption allowing certain activities such as sharing claims data that otherwise might have been barred as anti-competitive.

Earlier this year, Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and Sen. Arlen Specter, R-Pa., the ranking Republican committee member, introduced legislation to repeal the exemption. The bill also has strong backing from Sen. Trent Lott, R-Miss., who owned a coastal home destroyed by Hurricane Katrina.

Veteran Washington attorney and insurance lobbyist Julie Gackenback said it was unlikely that both houses of Congress would pass repeal legislation this term, with only a slight possibility that the Senate might.

“If repeal passes, there will be a long period of uncertainty, and the last thing this industry wants is uncertainty,” she said.

Repeal could set up a dual regulatory system with the big question mark being how the Federal Trade Commission would handle its new role as insurance regulator, she said.

Ms. Gackenback added that among the practices repeal could put in jeopardy would be loss data sharing, the guaranty fund system and residual markets.

She said the findings of the Anti-Trust Modernization Commission studying all anti-trust laws could also have an impact on the debate once they are released sometime this year.

Kay Noonan, general counsel for the National Association of Insurance Commissioners, said that repeal of McCarran Ferguson would not impact wrongful claims practices, remedies for which lie in state unfair trade practices acts.

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