McCarran-Ferguson Act


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McCarran-Ferguson Act

Legislation in the United States, passed in 1945, that exempts insurance companies from anti-trust law, except in cases of boycott, intimidation or coercion. It also states that federal law does not preempt state regulation of insurance (that is, state regulations trump federal law) unless federal legislation explicitly states otherwise. The act remains controversial.
References in periodicals archive ?
While the McCarran-Ferguson Act has come under fire over
Moreover, even if the Supreme Court looks beyond the plain language of the statute, the imposition of disparate impact liability on insurers would conflict with the McCarran-Ferguson Act and disrupt the business of insurance.
The suit also contends that, "That is not only a perverse result, but it also flies in the face of the McCarran-Ferguson Act, which entrusts insurance regulation to the states."
This was confirmed through the McCarran-Ferguson Act of 1945, reiterated through a congressional resolution included in the 1999 Gramm-Leach-Bliley Act, and again through provisions of the Dodd-Frank Act.
(Earlier this year, the Amsterdam Court of Appeal authorized the use of the Dutch collective-settlement statute to settle the claims of Converium's foreign investors on a classwide, opt-out basis.) Recently, he persuaded the Fourth Circuit Court of Appeals to uphold an order compelling arbitration of international insurance disputes in Sweden and to hold that the McCarran-Ferguson Act does not empower state law to reverse-preempt the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
It is unclear whether the Fair Housing Act applies to homeowners' insurance, as some courts have ruled that the law is preempted by the McCarran-Ferguson Act because it doesn't specifically mention insurance.
Relying on a broad interpretation of the McCarran-Ferguson Act, (11) these courts have held the damages available under civil RICO would impermissibly "invalidate, impair, or supersede" state insurance laws, which provide only for administrative remedies.
The industry no longer needs the McCarran-Ferguson Act's protection, but uses it as a shield against federal action to prevent collusion and price fixing.
However, there is still much work to do, particularly on systemic risk and with the renewed push by some members of Congress to repeal the limited exemption granted to insurers by the McCarran-Ferguson Act.
After Fifth Circuit's rehearing en banc on whether McCarran-Ferguson Act authorizes state law to reverse-preempt the Convention on the Recognition and Enforcement of Foreign Arbitral Awards or its implementing legislation, Court concludes that Act does not apply to Convention
Congress itself, in the McCarran-Ferguson Act of 1945, expressly forbade any federal regulation of the business of insurance, leaving that to the states.