Change In Insurer Antitrust Shield Proposed

The Leahy bill, introduced on Tuesday, called the Medical Malpractice Insurance Antitrust Act, would eliminate any antitrust immunity on medical malpractice for allegations of price-fixing, bid rigging and market allocation.

In a statement, Sen. Leahy said his bill repealing any antitrust immunity for medical malpractice is necessary so federal officials can investigate allegations of collusive pricing.

"I am hard-pressed to imagine that anyone could object to a prohibition on insurance carriers' fixing prices or dividing territories," he said.

But Mike Pickens, the Arkansas Insurance Commissioner and president of the National Association of Insurance Commissioners, said there is no evidence that medical malpractice insurers have engaged in price-fixing, bid rigging or market allocation.

In a letter to Sen. Judd Gregg, R-N.H., Mr. Pickens said that the preliminary evidence points to rising loss costs and legal defense costs.

Mr. Pickens said that states have strong laws that prohibit price-fixing and anti-competitive practices by insurers. The sharing of loss data among insurers is permitted, however, because it is necessary to encourage competition by giving potential new entrants to the marketplace and smaller insurers enough underwriting and rate-setting information to enter and remain viable in the marketplace.

"Again, the evidence points to high loss ratios, not price-fixing, as the primary driver of escalating premiums," Mr. Pickens said.

The Leahy bill would not affect state regulation of insurance.