NU Online News Service, Feb. 2, 9:05 a.m.EST

WASHINGTON–Insurance trade groups are asking the Houseto reject proposed legislation that would end the antitrustexemption afforded health and medical malpractice insurers by theMcCarran-Ferguson Act.

A group of 10 trade groups, nine representing property andcasualty and medical liability insurers and the NationalAssociation of Insurance and Financial Advisers, sent the letterFriday in anticipation that the House will soon vote on thelegislation.

The bill would also give the Federal Trade Commission theauthority to prepare studies and reports on the entire insuranceindustry.

According to industry officials and congressional staff, thelegislation will not include language protecting joint industryactivities, for example, compilation of historic loss data.

The letter noted that medical liability insurance is not ahealth insurance product, but is in fact "a property/casualtyinsurance liability product, underwritten by property/casualtycompanies for medical professionals and facilities."

In fact, the letter said, "the only thing even health-relatedabout medical malpractice insurance is simply its name and the factthat the medical profession and medical facilities purchaseit."

Moreover, the letter said, "Its inclusion in legislation torepeal McCarran-Ferguson for health insurance is misplaced."

It also cited a recent Congressional Research Service study thatrepealing the antitrust exemption afforded medical liabilityinsurers could result in "many lawsuits challenging someinsurer-cooperation practices."

The CRS report added that prohibiting necessary andpro-competitive insurer information sharing could "actuallydisserve consumers and lessen competition between insurancecompanies; e.g., if information sharing were categoricallyprohibited, some small companies that require it could be forced toleave the market."

The letter added, "Some members of Congress have a mistakenperception that the antitrust provisions of the McCarran-FergusonAct protect anticompetitive activities by medical liabilityinsurers. They do not."

Specifically, it said, the National Association of InsuranceCommissioners has stated that "no state insurance regulator hasseen evidence that suggests medical malpractice insurers haveengaged or are engaging in price-fixing, bid-rigging, or marketallocation."

Those signing the letter include the American InsuranceAssociation; the Council of Insurance Agents and Brokers; theFinancial Services Roundtable; the Independent Insurance Agents& Brokers of America; the National Association of Insurance andFinancial Advisors; 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.