NU Online News Service, Jan.28, 12:13 p.m. EST

WASHINGTON–House Democrats are planning a vote next week on legislation that would repeal the McCarran-Ferguson Act anti-trust laws exemption for health care and medical malpractice insurers.

The bill would also give the Federal Trade Commission the authority to prepare studies and reports on the entire insurance industry.

However, given the united insurance industry opposition to the legislation, there is some thought that supporters of the bill may not be able to win House passage, and withdraw the bill in its present form, some insurance lobbyists suggested.

According to industry representatives and congressional staff, the legislation will not include language protecting joint industry activities, for example, compilation of historic loss data.

This provision was added in committee to previous legislation passed by the House last year in connection with health care reform legislation. Such a provision is in the version of health care reform legislation passed by the House last year.

The latest bill has the support of the House leadership, including Speaker Nancy Pelosi, D-Calif., according to industry and congressional sources.

The bill is part of the effort by House Democrats to enact pieces of the health care reform legislation in the face of flagging political support for an omnibus health care reform measure.

The chief lawmakers supporting the latest bill are Rep. Pete DeFazio, D-0re., and Rep. Louise Slaughter, D-N.Y. Another backer is Rep. John Garamendi, D-Calif., a new member of Congress and former insurance commissioner for his state.

Blain Rethmeier, a spokesman for the American Insurance Association, called the House measure, a "solution in search of a problem."

He noted that insurers are subject to comprehensive regulation across the country, including rates and said, "Simply put, this would disrupt the industry's business environment and create substantial litigation and uncertainty."

Nicole Allen, vice president of communications for the Council of Insurance Agents and Brokers, said that if the bill is forced on the House floor, "it is reminiscent of the cap-and-trade vote last year."

Ms. Allen said rank-and-file House Democrats "may be asked to walk the plank on a measure that won't be signed into law, and wouldn't accomplish its stated aims even if it was accepted by the Senate."

"For those of us who philosophically support the Optional Federal Charter, we're long on record as saying we would commensurately accept changes in the McCarran-Ferguson Act," Ms. Allen said.

"But this is all of the downside with none of the regulatory upside," she explained.

"Thus, we would expect to see a very united insurance industry, and any such potential vote would be a major, not minor, interest to all of us," she said.

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, added that, "Repealing the limited exemption would be a misguided decision, and would ultimately do more harm than good."

He explained that, "Many members of Congress have a false perception of the exemption, which was enacted to foster competition in the marketplace. We would simply ask those members with concerns about the McCarran-Ferguson provision to look carefully at what it does and what it doesn't do."

Special Reports /

House Sets Med-Mal, Health Insurers Antitrust Exemption Vote

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