WASHINGTON–Insurance industry critics in Congress signaled yesterday they will continue their campaign against insurers by scheduling a March 7 hearing over whether carriers' antitrust immunity is good for consumers.
The hearing was set by Sen. Patrick Leahy, D-Vt., with another hearing due to commence today by the oversight panel of the House Financial Services Committee on the industry's handling of claims resulting from Hurricane Katrina.
Sen. Leahy is the chairman of the Senate Judiciary Committee, which has oversight over antitrust issues. A committee staffer said no witness list was available.
Strong criticism of the industry's handling of those claims is expected at the oversight panel hearing, especially by such witnesses as Democratic Reps. Gene Taylor, Miss., and William Jefferson, La. Both of their districts–Rep. Taylor's in Gulfport, Miss., and Rep. Jefferson's in New Orleans–suffered heavily from Hurricane Katrina and are having difficulty recovering.
The Senate hearing set by Sen. Leahy will be on the issue of "The McCarran-Ferguson Act and Antitrust Immunity: Good for Consumers?"
Sen. Leahy is the lead sponsor of S. 618, the Insurance Industry Competition Act. The bipartisan bill was introduced Feb. 15 by Sen. Leahy; Sen. Arlen Specter, R-Pa., ranking minority member of the committee; Harry Reid, D-Nev., Senate majority leader; and Trent Lott, R-Miss., Senate minority whip.
The decision to hold a hearing so soon after the introduction of the bill clearly signals that the committee will attempt to get the measure through in plenty of time for this Congress to act on it before it adjourns next fall before the 2008 election.
Industry lobbyists have voiced deep concerns about the bill, especially its potential impact on small insurers and agents.
However, insurance representatives say privately they seriously doubt that supporters of the antitrust bill will be able to garner the 60 votes needed to force action on the Senate floor. They said they believe the argument of potential harmful impact on small insurers and agents would serve to block the legislation.
Sens. Leahy and Specter are putting pressure on insurers after the industry's lobbying defeated legislation last year that would have created an alternative claims-processing mechanism for those workers injured by exposure to asbestos in the workplace.
Sen. Lott is angry with the industry over its handling of claims resulting from Hurricane Katrina. His own claim stemming from the destruction of his vacation home near Gulfport led him to sue State Farm. That claim, his lawyers said, has now been settled.
Sen. Leahy's legislation would give the Department of Justice and the Federal Trade Commission the authority to apply antitrust laws to "anticompetitive behavior by insurance companies," according to a floor statement made by Sen. Leahy when he introduced the bill, although he cited no evidence of such behavior by insurers or agents.
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