AIA Statement on Mccarran-Ferguson Amendment to H.R. 5

WASHINGTON, March 22 -- The American Insurance Association issued the following news release:

Melissa Shelk, vice president for federal affairs at the American Insurance Association (AIA), issued a statement today on an amendment added to H.R. 5, Protecting Access to Healthcare (PATH) Act, which would repeal the limited federal anti-trust exemption, provided under the McCarran-Ferguson Act, for health insurers. The amendment, sponsored by Rep. Paul Gosar (R-AZ), includes provisions which specifically exclude property-casualty insurance products from its intended scope.

The McCarran-Ferguson Act, adopted in 1945, provides insurers a limited exemption from federal anti-trust law where the business of insurance is regulated by the states. It reflects a Congressional balancing of regulatory and anti-trust policy. Under it, states regulate virtually every aspect of insurance, including licensing, market conduct, financial solvency, policy language, and underwriting standards. McCarran does not promote anti-competitive behavior and in fact enables smaller and start-up insurers to enter insurance markets.

H.R. 5 repeals a measure within the Patient Protection and Affordable Care Act of 2010 that created the Independent Payment Advisory Board. The House passed the bill by a vote of 223 to 181 earlier today.

Ms. Shelk's statement follows:

"Any attempts to broadly repeal McCarran-Ferguson are misguided and could have unintended consequences that, ironically, could stifle market competition while promoting regulatory uncertainty and increased litigation. While we would prefer to see McCarran left intact, the amendment's author recognized that property-casualty insurance products, along with other non-health insurance lines, should be exempted from the amendment's scope.

"In the decades since McCarran's adoption, insurers have been able, through state oversight of advisory organizations, to share loss cost data to predict future losses and to develop common policy forms, which has fostered competition in a manner that greatly benefits consumers."

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