Katrina Aftershock: Will Congress Repeal the Insurance Industry’s Federal Antitrust Exemption?
WASHINGTON - Will Congress strip the insurance industry of its longtime shield against federal antitrust laws? According to Sam Friedman, Editor-In-Chief of National Underwriter, that’s the burning issue facing Congress these days following complaints by disgruntled policyholders and lawmakers in the wake of disputes over alleged mishandling of Hurricane Katrina claims.
Friedman added that momentum is building in Congress to punish the industry for failing to satisfy all policyholders who lost their homes in Hurricane Katrina -- including Sen. Trent Lott, R-Miss., the minority whip -- by repealing the McCarran-Ferguson Act of 1945, which gives insurers limited immunity from federal antitrust laws to conduct certain joint actions, and grants the states authority to regulate carriers.
A long-time industry observer, Friedman believes the industry is in for a big fight, with the deck stacked against insurers.
“The industry took some devastating blows during a recent Congressional hearing regarding insurer handling of Hurricane Katrina claims,” said Friedman, a 25-year veteran insurance journalist, writing in his blog A View From the Press Box. “I was on Capitol Hill to witness the public flogging first hand, watching lawmakers -- some overtly hostile, others merely ignorant -- take turns beating insurers like a pinata.”
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