Saying that repeal of the anti-trust exemption would not benefit consumers, the NCSL’s Communications, Financial Services, and Interstate Commerce Committee adopted the resolution during the group’s annual Legislative Summit in Boston, attended by approximately 1700 bipartisan legislators representing every state in the Union.
Says Big “I” CEO Robert A. Rusbuldt, “The Big ‘I’ and its 300,000 members nationwide commend America’s state legislators on this resolution and we agree that the McCarran-Ferguson Act is crucial for consumer choice and comparison shopping, smaller and regional insurers, competition, and more. We believe the qualified application of federal antitrust law to this sector has served both the market and consumers well. Where marketplace anomalies exist, it is not due to the McCarran Act. In fact, without the Act, the situation would likely be exacerbated for consumers.”The resolution also expresses the group’s opposition to the Insurance Industry Competition Act (S.618 and H.R. 1081), arguing that such federal proposals would not increase the availability or lower the cost of insurance and would instead undermine efforts to make the industry more competitive.
Further, the resolution recognizes the pro-consumer aspects of the McCarran-Ferguson Act’s limited antitrust provisions, which the group says promote healthy competition by allowing the use of standardized insurance forms and the collection and sharing of historical loss data.
The NCSL is completely correct in pointing out that the potential loss of standardized forms would ‘make it more difficult for consumers to know what they are purchasing and to compare insurance options,’ said Wes Bissett, ” Big “I” senior counsel for state government affairs. Bissett continued, “We urge Congress to consider the well-founded concerns of state policymakers before taking any action that could harm insurance consumers and hinder competition, particularly the ability of small and medium sized insurance companies to compete in the marketplace.”NCSL is not alone in its concern about proposed changes to the McCarran-Ferguson Act.
Last April, the National Conference of Insurance Legislators (NCOIL) suggested to House and Senate leaders that changes to McCarran-Ferguson would result in destabilized insurance markets, negatively impact the ability of small and medium-sized insurers to compete with larger players, result in higher insurance prices and other negative effects for consumers, and spark years of costly litigation.