P/C Insurers Weigh in on Bills to Eliminate Health Insurers Antitrust Exemption

Property/casualty organizations have gathered forces to send a critical letter to judiciary-committee lawmakers in the House and Senate, arguing against legislative efforts to eliminate antitrust exemptions for a different sector of the insurance industry: health insurers.

The property/casualty groups are concerned that this move against health insurers could next extend to them. "It's easy to take a step from here to all of us," said Jimi Grande, senior vice president of federal and political affairs for National Association of Mutual Insurance Companies. "Believe me -- none of us want to be in the health care debate if we don't have to be."

The letter -- signed by nine insurance associations, including NAMIC, the American Insurance Association, Property Casualty Insurers Association of America, Reinsurance Association of America and the Independent Agents & Brokers of America -- argued that the bills are based on misconceptions of current law. The McCarran-Ferguson Act of 1945 "does not grant insurers blanket immunity from federal antitrust laws, as some have erroneously suggested, and it does not shield insurers from laws that prohibit them from engaging in boycotts, intimidation and coercion," the letter said.

"It's already illegal to do any of those things," Grande said.

This is in response to the "Health Insurance Industry Antitrust Enforcement Act of 2009" -- in both the House and Senate. Sen. Patrick Leahy, D-Vt., chairman of the Judiciary Committee, introduced the Senate version, arguing that there are no valid reasons that the industry should be exempted, and that taking it away may establish the increased competition called for by proponents of health reform. Leahy said his bill would partially repeal antitrust protections, only removing exemptions for what Leahy said would be "the most egregious anti-competitive conduct": price fixing, bid rigging and market allocations. McCarran-Ferguson's antitrust exemptions under "rule of reason" conditions would remain in force (BestWire, Sept. 17, 2009).

"There is no demonstrated need to expand the scope of the health care reform debate," the letter said. The groups content that this represents "a much broader, but undisclosed agenda."

They believe the legislation would "encourage attacks on insurers for marketplace behavior" and preempt or repeal "state laws establishing mechanisms for insurers to gather information."

Grande said the antitrust laws were established to foster competition, but this legislation could hamper the ability of small companies to acquire information from other companies that might otherwise be a violation of antitrust rules. "It allows more players into the market."

The letter said, "It would be ironic indeed if the primary purpose of the federal antitrust laws -- promoting competition -- was undercut through enactment of either bill."