“It is critical that NCOIL take a strong stance in support of the limited exemption from federal antitrust laws currently in the McCarran-Ferguson Act and voice their opposition to Congressional efforts to repeal that exemption,” said Tammy Velasquez, AIA Vice President and Director, State Affairs.
The McCarran-Ferguson Act (McCarran), approved by Congress in 1945, delegates authority to regulate the business of insurers to the states. McCarran creates a limited exemption from federal antitrust laws to the extent that the business of insurance – not the business of insurance companies – is regulated by the states. This limited exemption from federal antitrust laws is designed to prevent federal antitrust enforcement from undercutting insurance regulatory systems established by the states.
“Legislators and insurers have an interest in efficient and effective regulation, and they both should want to avoid duplicative, even potentially contradictory regulatory mandates from other agencies,” Velasquez stated. “AIA has a reform agenda for the state regulatory system, but as long as the states are designated regulators, then they should perform those functions without second-guessing by antitrust enforcers or consumer agencies. For this reason it’s important that NCOIL speak clearly in support of McCarran-Ferguson’s limited antitrust exemption.”
“Failure to do so,” Velasquez continued, “will result in new federal layers of regulation on top of the existing state regulatory system, erosion of areas where insurers can compete in a free market environment, and an uncertain legal climate. Such a result will be bad for consumers, insurers, and state legislators.”
NCOIL is also expected to consider a proposed resolution regarding state land-use policies during the Seattle meeting.
“As part of AIA’s Natural Catastrophe Agenda, we have called for the creation of ‘smart growth’ land use planning policies to help make communities more disaster resistant,” said Raymond Farmer, AIA Assistant Vice President. “We applaud NCOIL for looking at this issue, which is an important element in the long-term effort to help reduce the personal and economic toll of hurricanes and other natural disasters.”