Senate Judiciary Committee Holds
McCarran-Ferguson Act Hearing
Washington, D.C., June 21, 2006 — The Senate Judiciary Committee held a hearing yesterday to discuss "The McCarran-Ferguson Act: Implications of Repealing the Insurers' Antitrust Exemption." According to Sen. Arlen Specter, R-Pa., committee chairman, this is the first hearing on McCarran-Ferguson by the full committee since 1989.
Originally, the McCarran-Ferguson Act was enacted in 1945 to permit the states to continue regulating the insurance business. Under the Act, the business of insurance is exempt from some federal antitrust statutes to the extent that it is regulated by the states.
Marc Racicot, president of the American Insurance Association, was the lead witness. Racicot said: "... we believe that congressional review of the state insurance regulatory system is long overdue, including a frank and honest examination of the economic utility of government price controls and the regulation of insurance policy forms. In addition, we note that there is a growing understanding in Congress about the very real problems associated with the current state-based regulatory regime - and that steps must be taken to improve and modernize the way insurance is regulated."
The American Insurance Association (AIA) supports the National Insurance Act of 2006, S. 2509, introduced by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D.
Robert Hunter, insurance director, Consumer Federation of America (CFA), told the committee members: "CFA urges the Senate to repeal the antiquated, unnecessary and harmful insurance antitrust exemption for the benefit of the nation's consumers. We estimate that elimination of the exemption will save consumers about at least 10 percent of the current premiums, or about $45 billion a year."
"The Automotive Service Association supports the repeal or modification of the McCarran-Ferguson Act," said Bob Redding, ASA's Washington, D.C., representative. "We appreciate Chairman Specter holding a long overdue hearing on the issue. Although no legislative markup is scheduled in the Senate to date, clearly there is significant interest in the House and Senate for reform."
Those present to testify at the hearing included:
- The Honorable Marc Racicot, former governor of Montana, president, American Insurance Institute, Washington, D.C.
- Elinor R. Hoffmann, assistant attorney general, Antitrust Bureau, Office of the Attorney General for the State of New York, New York, N.Y.
- Michael McRaith, Illinois director of insurance; chair, Broker Activities Task Force, National Association of Insurance Commissioners, Chicago.
- Bob Hunter, insurance director, Consumer Federation of American, Washington, D.C.
- Kevin Thompson, senior vice president, Insurance Services Office, Jersey City, N.J.
- Donald C. Klawiter, chair, Section of Antitrust Law, American Bar Association, Washington, D.C.
To view the testimony from this hearing, please visit ASA's legislative Web site, www.TakingTheHill.com.
The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry. ASA's headquarters is in Bedford, Texas.
ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.asashop.org, or visit ASA's legislative Web site at www.TakingTheHill.com.
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