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NU Online News Service, Feb. 2, 9:05 a.m. EST
WASHINGTON—Insurance trade groups are asking the House to reject proposed legislation that would end the antitrust exemption afforded health and medical malpractice insurers by the McCarran-Ferguson Act.
A group of 10 trade groups, nine representing property and casualty and medical liability insurers and the National Association of Insurance and Financial Advisers, sent the letter Friday in anticipation that the House will soon vote on the legislation.
The bill would also give the Federal Trade Commission the authority to prepare studies and reports on the entire insurance industry.
According to industry officials and congressional staff, the legislation will not include language protecting joint industry activities, for example, compilation of historic loss data.
The letter noted that medical liability insurance is not a health insurance product, but is in fact “a property/casualty insurance liability product, underwritten by property/casualty companies for medical professionals and facilities.”
In fact, the letter said, “the only thing even health-related about medical malpractice insurance is simply its name and the fact that the medical profession and medical facilities purchase it.”
Moreover, the letter said, “Its inclusion in legislation to repeal McCarran-Ferguson for health insurance is misplaced.”
It also cited a recent Congressional Research Service study that repealing the antitrust exemption afforded medical liability insurers could result in “many lawsuits challenging some insurer-cooperation practices.”
The CRS report added that prohibiting necessary and pro-competitive insurer information sharing could “actually disserve consumers and lessen competition between insurance companies; e.g., if information sharing were categorically prohibited, some small companies that require it could be forced to leave the market.”
The letter added, “Some members of Congress have a mistaken perception that the antitrust provisions of the McCarran-Ferguson Act protect anticompetitive activities by medical liability insurers. They do not.”
Specifically, it said, the National Association of Insurance Commissioners has stated that “no state insurance regulator has seen evidence that suggests medical malpractice insurers have engaged or are engaging in price-fixing, bid-rigging, or market allocation.”
Those signing the letter include the American Insurance Association; the Council of Insurance Agents and Brokers; the Financial Services Roundtable; the Independent Insurance Agents & Brokers of America; the National Association of Insurance and Financial Advisors; the National Association of Mutual Insurance Companies; the National Association of Professional Insurance Agents; the Physician Insurers Association of America; the Property Casualty Insurers Association of America; and the Reinsurance Association of America.