***LEGISLATIVE ALERT***
DATE:
APRIL 6, 2007
TO:
NCOIL LEGISLATORS
FROM:
CANDACE THORSON
NCOIL DEPUTY EXECUTIVE DIRECTOR
RE:
NCOIL SENDS LETTER SUPPORTING MCCARRAN ANTITRUST
EXEMPTION—FEDERAL COMMISSION URGES FURTHER CONGRESSIONAL
REVIEW
Attached, please find:

an April 6 NCOIL letter to U.S. Sen. Patrick Leahy (D-VT) opposing S. 618, the Insurance
Industry Competition Act of 2007

an April 4 National Underwriter article entitled “Life Groups React To Antitrust Report”

an April 4 National Underwriter article entitled “Insurers See Silver Lining in Antitrust Report”

an April 3 BestWire article entitled “Long-Awaited Report Says Congress Should ‘Disfavor’
Antitrust Exemptions”

an April 3 National Underwriter article entitled “End Insurers’ Trust Exemption, U.S. Panel
Says”
NCOIL Letter to Sen. Leahy Re: Antitrust Exemption
NCOIL President Sen. Alan Sanborn (MI) sent a letter to Sen. Leahy, chair of the Judiciary
Committee, regarding S. 618, which would repeal McCarran’s limited antitrust exemption. The bill
is sponsored by Leahy and co-sponsored by Sen.’s Harry Reid (D-NV), Trent Lott (R-MS), Arlen
Specter (R-PA), and Mary Landrieu (R-LA).
The letter asserts that the McCarran-Ferguson exemption is:

not a loophole through which bad actors can evade antitrust requirements

critical to promoting competition

important to preventing a confusing and litigious regulatory environment

needed to ensure the operations of guaranty funds and residual market mechanisms
NCOIL sent a similar letter to Rep. John Conyers (D-MI), House Judiciary Committee Chair,
regarding companion bill H.B. 1081. The letter copied the sponsor, Rep. Peter DeFazio (D-OR),
and co-sponsors Rep.’s Rodney Alexander (R-LA), Bobby Jindal (R-LA), Charlie Melancon (DLA), Gene Taylor (D-MS), and Walter B. Jones (R-NC).
Antitrust Modernization Commission Findings
On April 3, a federal Antitrust Modernization Commission released its long-awaited review of U.S.
antitrust laws, including the McCarran exemption.
Though the Commission itself, which recommended further congressional examination of the
issue, did not call for outright repeal, its findings were unfavorable to the McCarran provision, and
statements of certain individual Commission members flat-out denounced it.
The Commission concluded, in part, that:

antitrust exemptions should be “disfavored” and granted rarely

courts should interpret all such exemptions narrowly

Congress should further examine the issue
Statements Denouncing McCarran-Ferguson
Individual Commission member statements (several of the 12 members are antitrust
lawyers) attached to the Commission report said, among other things:
“The repeal of some of the most unfortunate [exemptions], including particularly the McCarranFerguson Act [and three others] should not be delayed.…”—Commissioner Shenefled
“The Commission did hold some specific hearings on exemptions, addressing the McCarranFerguson insurance exemption [and others]. Sufficient evidence was presented…, in my view,
and sufficient independent analysis strongly confirms, that [this exemption has] outlived any utility
[it] may have had and should be repealed.”—Commissioner Jacobson, with Commissioners
Valentine and Warden
Commission Background
The Antitrust Modernization Commission was established by Congress in 2002 to “examine
whether the need exists to modernize the antitrust laws and to identify and study related
issues.” The report’s findings are recommendations and do not carry the force of law.
Please feel free to contact NCOIL at 202-220-3014 should you have any questions.