The McCarran-Ferguson Act

The McCarran-Ferguson Act - The McCarran-Ferguson Act of 1945 (15 U.S.C.A. § 1011 et seq.) gives states the authority to regulate the "business of insurance" without interference from federal regulation, unless federal law specifically provides otherwise.

is a United States federal law that exempts the business of insurance from most federal regulation, including federal anti-trust laws to a limited extent. The McCarran–Ferguson Act was passed by Congress in 1945 after the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the Commerce Clause in the U.S. Constitution.

The Act was sponsored by Senators Pat McCarran (D-NV) and Homer Ferguson (R-MI).

WASHINGTON (Feb. 26, 2010) — By a 406-19 vote, the U.S. House of Representatives has passed the Health Insurance Industry Fair Competition Act, which repeals the exemption health insurers have under the McCarran-Ferguson Act.

Passed in 1945, the McCarran-Ferguson Act states that federal antitrust law applies to the insurance industry only to the extent that it is not regulated by state law. The Automotive Service Association, which for years has championed a total repeal of McCarran-Ferguson as anti-competitive and injurious to small business, praised passage of the Health Insurance Industry Fair Competition Act as a good first step.

The bill now goes to the Senate.

http://www.writing.upenn.edu/~afilreis/50s/mccarran-act-intro.html