Senate Subcommittee Examines Brokerage Practices

The U.S. Senate Subcommittee on Financial Management, Budget, and International Security of the Governmental Affairs Committee recently held an oversight hearing on insurance brokerage practices. The hearing was presided over by Sen. Peter Fitzgerald, R-Ill., who cited the McCarran-Ferguson Act of 1945 and suggested that Congress should reconsider the antitrust exemptions of the act. Witnesses testifying before the subcommittee included representatives of insurance trade groups, as well as Eliot Spitzer, New York’s attorney general; Richard Blumenthal, Connecticut’s attorney general; Gregory Serio, New York’s superintendent of insurance; and John Garamendi, California’s insurance commissioner.

Connecticut’s investigation, which began last spring, has expanded in size and scope, testified Blumenthal. Nevertheless, the attorney general said, the issue should be handled on a state level. “Federalizing this problem is unnecessary and unwise,” he said. “Rather than rely on federal regulation, state insurance laws should be reinvigorated and reinvented.”