NU Online News Service, Oct. 8, 2:58 p.m.EDT

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A group of nine property and casualty insurance industry tradegroups today charged that legislation proposed in Congress, thatwould end the exemption under antitrust laws for healthcareinsurers, had a hidden agenda of opening up some segments of theinsurance industry to more lawsuits.

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The legislation was introduced in response to what some inCongress felt were unfair attacks this summer by people they linkedto the insurance industry as proponents of healthcare reform.

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They charged that the bills are "an attempt to radically rewritethe antitrust laws for a certain segment of the insurancebusiness," and argued that those who support them have "a muchbroader, but undisclosed agenda."

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A joint letter was sent to the leadership of the House JudiciaryCommittee that voiced "strong opposition" to the "Health InsuranceIndustry Antitrust Enforcement Act of 2009." The bills wereintroduced as H.R. 3596 in the House and Se. 1681 in theSenate.

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The letter was sent in connection with a hearing being heldtoday by the Subcommittee on the Courts and Competition Policy ofthe House Judiciary Committee.

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Further, the letter said there is no demonstrated need "toexpand the scope of the healthcare reform debate in thisfashion."

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The letter was signed by the chief executives of the AmericanInsurance Association; the Council of Insurance Agents and Brokers;the Financial Services Roundtable; the Independent Agents &Brokers of America; the National Association of Mutual InsuranceCompanies; the National Association of Professional InsuranceAgents; the Physician Insurers Association of America; the PropertyCasualty Insurers Association of America; and the ReinsuranceAssociation of America.

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The letter contended that bills would "repeal long-standingprovisions" of the McCarran-Ferguson Act with respect to health andmedical malpractice insurance (more appropriately called medicalprofessional liability insurance) issuers.

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The accusations of a "broader agenda" cited by the industry inthe letter voiced concern about provisions in the bill that:

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o "Appear to expand" the boundaries of antitrust violations inorder to encourage attacks on insurers for marketplace behaviorthat would not otherwise be a violation of federal antitrust lawsirrespective of McCarran-Ferguson.

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o Would have the effect of preempting or repealing state lawsestablishing mechanisms for insurers to gather information anddevelop actuarially-based rates through organizations that havebeen (i) created precisely for those purposes, (ii) are licensedand regulated by the states; and (iii) whose availability iscritical to the states in carrying out their regulatoryresponsibilities.

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o The provision "thus would leave the states with only twooptions for health and medical malpractice insurance: they wouldeither be required to set the prices themselves for health andmedical malpractice insurance or be denied the right to have anymechanism for reviewing and regulating the prices established inthe marketplace," the letter said.

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o The bills appear designed to deny the affected insurers ofstandard antitrust defenses, such as the state action doctrine.

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"We, therefore, urge you to oppose these current bills, as theywould bring no consumer benefit while causing enormous marketplacedisruption that might have the perverse effect of discouraging newmarketplace entrants," the letter said.

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"It would be ironic indeed if the primary purpose of the federalantitrust laws–promoting competition–was undercut through enactmentof either bill," the letter concluded.

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