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

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

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

They charged that the bills are "an attempt to radically rewrite the antitrust laws for a certain segment of the insurance business," and argued that those who support them have "a much broader, but undisclosed agenda."

A joint letter was sent to the leadership of the House Judiciary Committee that voiced "strong opposition" to the "Health Insurance Industry Antitrust Enforcement Act of 2009." The bills were introduced as H.R. 3596 in the House and Se. 1681 in the Senate.

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

Further, the letter said there is no demonstrated need "to expand the scope of the healthcare reform debate in this fashion."

The letter was signed by the chief executives of the American Insurance Association; the Council of Insurance Agents and Brokers; the Financial Services Roundtable; the Independent Agents & Brokers of America; the National Association of Mutual Insurance Companies; the National Association of Professional Insurance Agents; the Physician Insurers Association of America; the Property Casualty Insurers Association of America; and the Reinsurance Association of America.

The letter contended that bills would "repeal long-standing provisions" of the McCarran-Ferguson Act with respect to health and medical malpractice insurance (more appropriately called medical professional liability insurance) issuers.

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

o "Appear to expand" the boundaries of antitrust violations in order to encourage attacks on insurers for marketplace behavior that would not otherwise be a violation of federal antitrust laws irrespective of McCarran-Ferguson.

o Would have the effect of preempting or repealing state laws establishing mechanisms for insurers to gather information and develop actuarially-based rates through organizations that have been (i) created precisely for those purposes, (ii) are licensed and regulated by the states; and (iii) whose availability is critical to the states in carrying out their regulatory responsibilities.

o The provision "thus would leave the states with only two options for health and medical malpractice insurance: they would either be required to set the prices themselves for health and medical malpractice insurance or be denied the right to have any mechanism for reviewing and regulating the prices established in the marketplace," the letter said.

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

"We, therefore, urge you to oppose these current bills, as they would bring no consumer benefit while causing enormous marketplace disruption that might have the perverse effect of discouraging new marketplace entrants," the letter said.

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

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