{ "id": "RL33683", "type": "CRS Report", "typeId": "REPORTS", "number": "RL33683", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 354449, "date": "2009-01-29", "retrieved": "2016-04-07T02:50:14.527162", "title": "Courts Narrow McCarran-Ferguson Antitrust Exemption for \u201cBusiness of Insurance\u201d: Viability of \u201cState Action\u201d Doctrine as an Alternative", "summary": "In Paul v. Virginia (75 U.S. (8 Wall.) 168 (1868)), the Supreme Court ruled that \u201c[i]ssuing a policy of insurance is not a transaction of [interstate] commerce.\u201d United States v. South-Eastern Underwriters Ass\u2019n. (322 U.S. 533 (1944)) held that the federal antitrust laws were applicable to an insurance association\u2019s interstate activities in restraint of trade. Although the 1944 Court did not specifically overrule its prior determination, the case was viewed as a reversal of 75 years of precedent and practice, and created significant apprehension about the continued viability of state insurance regulation and taxation of insurance premiums. Congress\u2019 response was the 1945 McCarran-Ferguson Act. It prohibits application of the federal antitrust laws and similar provisions in the Federal Trade Commission (FTC) Act, as well as most other federal statutes, to the \u201cbusiness of insurance\u201d to the extent that such business is regulated by State law\u2014except that the antitrust laws are applicable if it is determined that an insurance practice amounts to a boycott. Early McCarran-Ferguson decisions mostly favored insurance companies. After 1969, however, the exemption for the \u201cbusiness of insurance\u201d was generally limited to activities surrounding insurance companies\u2019 relationships with their policyholders. In 2003, the Supreme Court ruled that McCarran case law prohibiting the indirect application of federal antitrust (or other) laws to the \u201cbusiness of insurance\u201d would no longer control with respect to those areas over which Congress has unquestionable legislative authority (e.g., ERISA, civil rights, securities), notwithstanding insurance-company involvement. The issue of amending McCarran Ferguson so as to further limit the scope of the exemption for the \u201cbusiness of insurance\u201d continued to receive attention in the 110th Congress, with the introduction of at least two bipartisan measures. S. 618 would not only have eliminated the antitrust exemption provided by McCarran-Ferguson, it would also have restored the FTC\u2019s authority to investigate the insurance industry. An identical bill, H.R. 1081, was introduced in the House. Both bills would have retained the exemption for the applicability of the FTC Act, \u201cas it relates to areas other than unfair competition.\u201d It is not known at this time whether the issue will be revisited in the 111th Congress. \nEven in the event the McCarran exemption were to be severely limited or totally eliminated, however, the state-action doctrine in antitrust law has the potential to mitigate the consequences of either. State action stands for the proposition that the federal antitrust laws do not apply to the states, nor to private individuals acting either under state order or authorization. To the extent that state regulation of insurance embodies \u201cclearly articulated\u201d state policy, and regulators \u201cactively supervise\u201d the activities of insurance companies, the industry\u2019s antitrust exemption could actually be broadened to include actions not clearly \u201cthe business of insurance.\u201d (Those phrases have been firmly embedded in the state-action-doctrine jurisprudence in the antitrust law for more than 25 years.) This report will be updated as needed. See, also, CRS Report RL31982, Insurance Regulation: History, Background, and Recent Congressional Oversight, CRS Report RL32789, Insurance Regulation: Issues, Background, and Current Legislation, CRS Report RL33439, Insurance Regulation in the United States and Abroad, CRS Report RL33892, Post-Katrina Insurance Issues Surrounding Water Damage Exclusions in Homeowners\u2019 Insurance Policies, and CRS Report RS22506, Surplus Lines Insurance: Background and Current Legislation for information on other issues affecting or concerning insurance regulation, including a discussion of issues surrounding the option of federal chartering and regulation of insurance companies, which would generally make the federal antitrust laws applicable to those entities opting for federal regulation.", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RL33683", "sha1": "72c6c2555b0644cad6ea1a73067312773ebaf209", "filename": "files/20090129_RL33683_72c6c2555b0644cad6ea1a73067312773ebaf209.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RL33683", "sha1": "3f8c4536460b505926fdab442d0cb9cea9cea9f6", "filename": "files/20090129_RL33683_3f8c4536460b505926fdab442d0cb9cea9cea9f6.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc822114/", "id": "RL33683_2007Mar12", "date": "2007-03-12", "retrieved": "2016-03-19T13:57:26", "title": "Courts Narrow McCarran-Ferguson Antitrust Exemption for \u201dBusiness of Insurance\u201d; Viability of \u201dState Action\u201d Doctrine as an Alternative", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20070312_RL33683_9b029913ef5948d0e4784a663cc1b2390321b171.pdf" }, { "format": "HTML", "filename": "files/20070312_RL33683_9b029913ef5948d0e4784a663cc1b2390321b171.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc808363/", "id": "RL33683_2006Nov13", "date": "2006-11-13", "retrieved": "2016-03-19T13:57:26", "title": "Courts Narrow McCarran-Ferguson Antitrust Exemption for \u201cBusiness of Insurance\u201d; Possible Congressional Response", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20061113_RL33683_0e9f7f762b97b8e7b24884e45b417c95a4168462.pdf" }, { "format": "HTML", "filename": "files/20061113_RL33683_0e9f7f762b97b8e7b24884e45b417c95a4168462.html" } ], "topics": [] } ], "topics": [ "Domestic Social Policy" ] }