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

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

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

The landmark 1945 legislation gave states the authority toregulate the business of insurance and granted the industry ananti-trust exemption allowing certain activities such as sharingclaims data that otherwise might have been barred asanti-competitive.

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

Veteran Washington attorney and insurance lobbyist JulieGackenback said it was unlikely that both houses of Congress wouldpass repeal legislation this term, with only a slight possibilitythat the Senate might.

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

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

Ms. Gackenback added that among the practices repeal could putin jeopardy would be loss data sharing, the guaranty fund systemand residual markets.

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

Kay Noonan, general counsel for the National Association ofInsurance Commissioners, said that repeal of McCarran Fergusonwould not impact wrongful claims practices, remedies for which liein state unfair trade practices acts.