House Panel OKs Insurance Antitrust Bill

A bill repealing many of the insurance industry’s exemptions from antitrust laws was approved Wednesday by the House Judiciary Committee over unanimous Republican opposition.

On a 19-17 vote, the panel voted to open insurance companies to antitrust lawsuits for price-fixing, attempted monopolizing, allocating territories among rival companies or forcing consumers to buy insurance they do not want to qualify for coverage that they do.

Three of the committee’s 22 Democrats, Reps. Dan Glickman of Kansas, Bruce Morrison of Connecticut and Edward Feighan of Ohio, voted with all of the 14 Republicans in opposing the bill.

Insurance companies and their agents have enjoyed immunity from antitrust suits since 1945 under the McCarran-Feguson Act, which delegated regulation of the now $500-billion-a-year industry to state governments.

Consumer groups and others have complained since the mid-1970s that lax oversight by some states has permitted the companies to use anti-competitive practices to deny coverage and raise rates dramatically.

“Private individuals, local governments and businesses of all sizes have found their premiums skyrocketing and their coverage severely restricted,” said Rep. Jack Brooks (D-Tex.), the judiciary committee’s chairman. “Congress can no longer ignore the widespread economic dislocation caused by unreasonably high premiums or policies that are unavailable at any price.”

The federal antitrust prohibitions would not apply in states with “active” regulatory programs.