Anti-Trust Exemption Needed for the Insurance Industry

There is a lot of talk coming out of congress regarding the anti-trust exemption for the insurance industry. The McCarren Ferguson act which was passed over 40 years ago, gives the insurance industry the ability to share and pool loss data in order to set rates. Many in congress are saying that this allows price fixing by insurance companies and has contributed to the high cost of health and property/casualty insurance. The insurance industry and State insurance departments refute this accusation. Without the ability to pool loss data smaller insurance companies will not be able to set adequate rates in order to make a profit. The data information from others in the business allows more competition because small and medium companies can do business and compete with larger insurance companies. If this is to be abolished, small to medium insurance companies would not have the customer base, history, or money to get this all important loss data. A repeal of the McCarren Ferguson act will only reduce competition in the marketplace because insurance companies may go out of business. Until next time be careful out there and know your risk. K

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