McCarran-Ferguson Act

(redirected from McCarran-Ferguson Act of 1945)
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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 ?
The bill also would set up a national guaranty corporation to make good on claims of failed insurers and repeal the McCarran-Ferguson Act of 1945, which provides an antitrust exemption for the business of insurance.
Senate appropriators reiterated their position that HUD should not pursue regulatory authority over the property insurance industry through the Fair Housing Act because the McCarran-Ferguson Act of 1945 explicitly forbids this except where Federal law specifically relates to the business of insurance.
The industry also has had a relatively broad exemption from federal antitrust laws since the passage of the McCarran-Ferguson Act of 1945.(1) For example, until at least 1990 (see Joskow and McLaughlin, 1991), "rating bureaus" and similar industry associations issued rates that either were required for bureau members or were disseminated as "advisory." Although exemption from federal antitrust laws is based on the existence of state regulation, the objectives and intensity of state regulation vary across insurance lines and over time.
But the McCarran-Ferguson Act of 1945 mandates state oversight of insurance companies unless a federal law specifically says otherwise.
Peter Fitzgerald, R-Ill., who cited the McCarran-Ferguson Act of 1945 and suggested that Congress should reconsider the antitrust exemptions of the act.
Since the California Department of Insurance is bound by the McCarran-Ferguson Act of 1945, she says, "some would say it does not comport with the sovereign immunity Congress granted to the Indian tribes, which does not let them engage in business off the reservation affecting the citizens of California."
In Washington, for example, insurance regulation is a burden that ostensibly was handed over to the states via the McCarran-Ferguson Act of 1945. But the barrier has always been incomplete and porous, and insurance issues have continued to leak into the jurisdictions of reluctant federal officials.
The first was the McCarran-Ferguson Act of 1945, which effectively stated that insurance would be state regulated unless federal regulation spoke specifically to a certain issue.
The states have regulated insurance since the 1800s, and the system was officially buttressed by the McCarran-Ferguson act of 1945. yet the feds are seeking to usurp that long-term authority by regulating certain insurance products (or aspects of those products)--with very little documentation to support such a move.