Will Congress strip the insurance industry of its cherished antitrust exemption to punish carriers for allegedly cheating homeowners on Hurricane Katrina claims? And if they do pull the rug out from under the industry, what difference would it make? In fact, wouldn't such a hasty overreaction do more harm than good? Those were just a few of the critical questions haunting industry lobbyists as they were dragged into the harsh glare of the Capitol Hill spotlight earlier this week.
This past Wednesday, the Senate Judiciary Committee held a hearing on The McCarran-Ferguson Act: Implications of Repealing the Insurers Antitrust Exemption. The point was to consider the potential ramifications of a bill, S.618, The Insurance Industry Competition Act of 2007, that would repeal the industry's limited federal antitrust immunity under the 1945 McCarran-Ferguson Act.
The bill's name, though not meant to be ironic, is a hoot, since subjecting insurers to federal antitrust laws would likely mean an end to the sharing of data and use of common policy forms–two key elements in keeping the market competitive, policies simpler to understand and prices down for consumers.
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