McCarran-Ferguson Repeal Still a Concern

While there are few direct threats to the property/casualty industry in the current U.S. Congress, P/C insurers are advised to remain vigilant regarding attempts to alter antitrust exemptions insurers currently enjoy under the McCarran-Ferguson Act.

At the recently concluded American Association of Insurance Services Main Event conference, Thomas Litjen, VP of federal government relations for the Property Casualty Insurers Association of America (PCI), told attendees that despite Congress's focus on the nation's budget crisis, insurers need to be mindful of issues that could have a spillover effect on them. In the case of McCarran-Ferguson, Litjen said although repeal efforts have been largely and unsuccessfully aimed at health insurers, lawmakers could extend a repeal to include medical malpractice insurance, a P/C line of business. "In such a small specialty line, the repeal of McCarran-Ferguson would hurt competition," Litjen said. "It would hurt new entrants into the line."

Moreover, changes to federal health policy could the impact P&C insurers in other ways. “We can expect major, if not tectonic, changes in cost-shifting in this area,” he said. “I predict some real adverse impacts on our industry.”

Litjen said other regulatory issues of concern for insurers include the delay in the appointment of a voting insurance industry representative to the newly-created federal Financial Stability Oversight Council and the seemingly eternal struggle to craft a long-term extension of the National Flood Insurance Program. 

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