08-R073

2008 -- H 7269

Enacted 02/27/08

 

 

H O U S E  R E S O L U T I O N

OPPOSING THE AMENDMENT OR REPEAL OF THE MCCARRAN-FERGUSON ACT

     

     

     Introduced By: Representatives Kennedy, San Bento, Picard, Williams, and Lewiss

     Date Introduced: January 29, 2008

 

 

     WHEREAS, The United States Congress, in 1945, passed the McCarran-Ferguson Act,

granting insurers a limited antitrust exemption and providing states with the sole authority to

regulate the business of insurance; and

      WHEREAS, This authority has led to the successful promotion of a strong, efficient,

consumer-based system of insurance oversight; and

      WHEREAS, State legislatures, state regulators, and state attorneys general have proven

     responsive to the needs of their constituents and the need for insurance products and regulation

that suits their states’ unique market demands; and

      WHEREAS, The states, along with the National Conference of Insurance Legislators

(NCOIL) and other groups, continue to address issues of uniformity and modernization by

enacting legislation that streamlines and strengthens regulation throughout the states, in response

to an increasingly competitive and global insurance market; and

      WHEREAS, The limited antitrust exemption granted under the McCarran-Ferguson Act

is not a loophole through which insurers can avoid prosecution for antitrust violations such as

boycotts, intimidation, or coercion, nor does it limit the abilities of state attorneys general to

prosecute crimes under existing state antitrust laws; and

      WHEREAS, The McCarran-Ferguson Act’s limited antitrust exemption fosters

competition by granting insurers the ability to share loss history and other information and

ensuring that smaller and more regional insurers are able to compete with large insurers that are

less dependant on industry-wide data; and

      WHEREAS, The “Insurance Industry Competition Act” (S. 618/H.R. 1081) would

repeal the limited antitrust exemption granted under the McCarran-Ferguson Act; apply to the

business of insurance consumer-protection provisions of the Federal Trade Commission Act to

the extent that they are not regulated by state law; and authorize the Federal Trade Commission

and the United States Justice Department to oversee the business of insurance; and

      WHEREAS, Subjecting consumers and the insurance industry to the complicated and

very likely contradictory system of state and federal regulation contemplated by S. 618/H.R. 1081

would lead to confusion that would destabilize insurance markets that rely on predictability to

gauge risks and price products, as well as lead to years of costly litigation; and

      WHEREAS, Any changes to the limited antitrust exemption, such as those envisioned by

     S. 618/H.R. 1081, would not lower insurance costs for consumers, but, in fact, could have the

opposite effect should smaller insurers be driven from the market, particularly in communities

with limited availability and affordability of coverage; and

      WHEREAS, Any amendment to the McCarran-Ferguson Act, including S. 618/H.R.

1081, could call into question the operation of state guaranty funds and residual markets

mechanisms that, respectively, protect claimants whose insurance companies have gone insolvent

and ensure that insurance is available to all; now, therefore be it

      RESOLVED, That this House of Representatives of the State of Rhode Island and

Providence Plantations hereby joins the National Conference of Insurance Legislators in opposing

passage of S. 618/H.R. 1081 on the grounds that it misinterprets the role of states in enforcing

antitrust protections and would jeopardize insurer practices that promote available and affordable

coverage; expose insurance markets to uncertainty and litigation; and create an environment that

inadvertently disadvantages consumers most in need; and be it further

      RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

transmit duly certified copies of this resolution to the members of the Rhode Island Congressional

Delegation, members of the United States House of Representatives Committee on the Judiciary,

and members of the United States Senate Committee on the Judiciary.

     

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LC00968

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