"However, that exemption is only triggered when a state has created laws to regulate the business of insurance itself," Mr. Kelly said. "McCarran does not exempt insurers from state antitrust laws; neither does it exempt insurers from heavy state regulatory scrutiny."

He noted that any discussion of repealing McCarran-Ferguson must include a discussion about "reforming insurance regulation in this country. If a healthy debate about modernizing insurance regulation, for example--as called for in optional federal charter legislation--came as a result of this legislation being introduced, we would welcome such a debate."

Marliss Browder, a senior federal affairs director for the National Association of Mutual Insurance Companies, said if enacted, the proposed legislation "would introduce a system of dual regulation to the insurance industry, ultimately leading to federal regulation of insurance."

The current law, she said, promotes competition in the industry because it allows companies to exchange critical data "regarding losses and other factors; allows development of standardized policy language; facilitates participation and oversight of state guaranty funds; permits state control over liquidations; and enables the development and operation of assigned risk plans."

Ms. Browder contended that changes to the law "could curtail insurers' ability to exchange critical data, endangering market participation by smaller insurers and making it more difficult for carriers to enter new markets."

She added that threats to standardization of policy language would make it more difficult for consumers to compare policies and prices. "Barriers to operation of assigned risk plans and guaranty funds would undermine the functioning of insurance markets," she said.

Ben McKay, senior vice president, federal government affairs, for the Property Casualty Insurers Association of America, claimed that the "limited antitrust exemption provided by the McCarran-Ferguson Act has proven essential to insurance consumers, in terms of availability, selection and price."

He said the law promotes competition and the loss of this important provision would likely "damage small companies, prevent new entrants into the insurance industry, and diminish the ability of existing insurers of all sizes to expand into new markets or new product lines. Such results would severely limit insurance options for consumers across America."

Charles Symington Jr., senior vice president for government affairs and federal relations for the Independent Insurance Agents and Brokers of America, said the legislation as proposed "could have negative implications for insurance purchasers."

He reiterated testimony before the Senate Banking Committee last year that urged the committee, at a minimum, to await the report of the Antitrust Modernization Commission, established by Congress two years ago to study a variety of antitrust issues--including the multiplicity of exemptions and privileges currently existing--before undertaking to amend the McCarran-Ferguson Act.

"There is little evidence indicating that wholesale changes to the McCarran-Ferguson antitrust exemption are needed or even desirable," said Tom Koonce, IIABA assistant vice president for federal government affairs.

"We urge Congress to think very hard and deliberately before taking any action that could harm insurance consumers and affect competition, particularly the ability of small and medium-sized insurance companies to compete in the marketplace," Mr. Koonce said.