Insurance Antitrust Law Spooks Property-Casualty Insurers

Congress’ efforts to block health insurers from continuing to share loss-data with one another leaves the door open for future legislation that could strip the entire insurance sector from pooling such data, non-health insurers say.

The House voted March 22 to pass the Competitive Health Insurance Reform Act (H.R. 372), which would repeal—for health insurers—a 65-year-old antitrust exemption that allows all insurers share data on their losses.


The repeal of the antitrust part of the McCarran-Ferguson Act for health insurers will lead to increased competition in the health underwriting market, lawmakers supporting the bill said. But according to the property-casualty insurance sector, the repeal of antitrust exemptions for one insurance sector could lead lawmakers to abolish the exemption from all sectors.

“Passage of H.R. 372 could [lead] to a slippery slope for non-health lines of insurance such as property and casualty insurance, and life insurance,” Robert Rusbuldt, president & CEO of the Insurance Agents and Brokers of America, said in a March 22 press release. “If the bill becomes law, lawmakers might say, ‘[I]f the exemption is rolled back for one line of insurance, why not others?’”

“One of the main benefits of the exemption is that it allows insurers to share information on insurance losses so that the insurance industry can better project future losses and charge actuarially based prices for their products,” the release said.

Actuarial rates are insurance rates that reflect the risk to the insurer to offer coverage.

Pooling loss data is especially important for small insurers that don’t have the extensive datasets afforded to large insurers, the release said. Competition will subsequently go down in non-health insurance sectors if the data pools are no longer able to be shared, the release says. 

The bill, sponsored by Rep. Paul Gosar (R-Ariz.), as passed specifically allows property-casualty insurers and other non-health insurers to continue operating under the antitrust exception. 

But the insurance industry called into question Congress’s commitment to that exception when the House Rules Committee considered an amendment to rope in medical malpractice insurance coverage—which is classified as property-casualty liability insurance—into the exemption rollback. That amendment ultimately failed.

Measures Already in Place: Industry.

Lawmakers are wasting their time trying to repeal McCarron-Ferguson because they believe the act gives broad antitrust exemptions, even though it doesn’t, insurance groups said.


State rules also expressly forbid the types of anticompetitive behaviors lawmakers think are allowed under McCarron-Ferguson, they said, noting that state regulators already review and approve insurance rates. 

“[A]nticompetitive price fixing, bid rigging, and market allocations are generally illegal under state antitrust laws,” the Property Casualty Insurers Association of America wrote in a February testimony. 

The American Insurance Association (AIA) voiced concern over the repeal measure as well, saying the McCarran-Ferguson Act and insurers’ ability to operate under it was being incorrectly targeted.

“To be fair to all customers—not to mention to be able to stay in business—insurers must be able to price their policies to cover their likely losses,” J. Stephen Zielezienski, senior vice president and general counsel for AIA, said in a February congressional testimony. 

The loss-data pooling aids in insurers' understanding of their risk.