WASHINGTON--NAIC President Walter Bell today ruled out supportby state regulators for a safe harbor for small insurers fromantitrust laws in a post-McCarran-Ferguson Act world.

In comments after a speech to life insurance agents meetinghere, Mr. Bell, also insurance commissioner of Alabama, said it wasessential that small insurers have access to claims and other datain order to remain competitive.

He acknowledged, however, that removing large insurers from themix would make it too expensive for small insurers to access thedata, and also make it difficult for Insurance Services Office(ISO) to remain in business.

Mr. Bell was extremely assertive in saying that continued stateleadership in insurance regulation was the way to go. He made hiscomments at a Capitol Hill event for the presidents-elect of theNational Association of Insurance and Financial Advisers andselected local associations.

Noting the quick response of state insurance regulators to atornado a year ago in Enterprise, Ala., in which 10 children werekilled when a school cafeteria collapsed, Mr. Bell said, "It didn'ttake me long to figure out that states are the best place toregulate insurance--not Washington, D.C."

He added, "State-based regulation is the best system."

He acknowledged that "there is strong momentum" in the Senatefor legislation repealing McCarran-Ferguson.

He said the primary sponsors--including Sen. Trent Lott,R-Miss.; Sen. Pat Leahy, D-Vt., chairman of the Senate JudiciaryCommittee; Sen. Arlen Specter, R-Pa., ranking minority member ofthe Judiciary panel; and Sen. Harry Reid, D-Nev., Senate majorityleader--have the power to authorize committee action on the bill atany time.

He said a number of Senate committees have held hearings on theissue, noting that the bill has strong support in the House,although no hearings on the issue have yet been held in thatchamber.

He also said that insurance commissioners would make themselvesavailable to members of Congress to discuss the issue at any time.The first thing they would tell members of Congress, he said, wasthat a "convergence of issues"--notably claims management andallegations of illegal activities by insurance brokers--and notantitrust violations, prompted members of Congress to introduce theMcCarran-Ferguson Act repeal legislation.

But, he said, "the system worked." Noting huge fines imposed onMarsh as a result of an alleged bid-rigging scandal, he said"existing federal and state laws have proven sufficient to combatalleged wrongdoing in the insurance industry. Congress shouldcarefully examine the implications of McCarran-Ferguson beforerepealing" the exemption.

"Act once, but consider it twice" before repealingMcCarran-Ferguson, he said. "There is no smoking gun" that demandsrepeal of McCarran-Ferguson, he added.

Mr. Bell also said that a number of other bills that wouldimpose additional oversight and responsibilities on insurers havebeen introduced as a result of the criticism of the industry'shandling of claims from Hurricanes Katrina and Rita.

But, he said, "the stars are aligned," meaning that allcomponents of the insurance industry have voiced support forMcCarran-Ferguson.

"Ironically," he said, "the McCarran-Ferguson repeal legislationhas taken the focus totally away from supporters of the OptionalFederal Charter."

He also defended the industry's handling of claims resultingfrom Hurricanes Katrina and Rita.

Asked to respond to comments by Sen. Lott at a hearing last weekthat the industry's conduct in handling those claims was"outrageous, arrogant and mean-spirited," and that state AttorneyGeneral Jim Hood had "a lot of evidence of misconduct and fraud" byState Farm in handling of claims, Commissioner Bell said he hadtalked to a lot of chief executive officers of companies involvedin insuring Mississippi homeowners, and that "they did the rightthing.

"They went overboard to protect the consumers in handlingclaims," Mr. Bell concluded.