Indeed, the commission added, insurance companies would bear no greater risk than companies in other industries engaged in data sharing and other collaborative undertakings. The report warned that to the extent that insurance companies engage in anticompetitive collusion, however, then they appropriately would be subject to antitrust liability.

Not much comfort there for insurer groups, which did a good job countering the argument that courts would be the best place to sort out any aftershocks to the market.

The National Association of Mutual Insurance Companies said the commission appears to be unduly confident that courts with little or no experience adjudicating insurance issues would be able to distinguish clearly between pro-competitive cooperative insurance practices and those that have anti-competitive effects. We are not nearly as optimistic about this prospect as is the commission.

Could you imagine the trouble and expense of litigating all of the industry's joint operations when it comes to data sharing and standardization of policy language? It would be a field day for trial lawyers, without any apparent benefit to consumers.

Has anyone shown that insurer data-sharing undermines competition? To the contrary, such practices allow smaller carriers to compete, providing more options for buyers and keeping costs and prices lower than they would be in a purely Darwinian free market, where only the biggest carriers–able to live off their own massive databases–could survive.

Is this really necessary? As the Property Casualty Insurers Association of America pointed out, existing state and federal laws expressly prohibit insurers from collusion, and the exemption only allows insurers limited authority to share specific loss data that ultimately makes the market more competitive by providing small- and medium-sized companies the ability to compete with larger insurers.

Revoking McCarran protections would be counterproductive, but the assumption by a growing number of federal officials appears to be just the opposite.

I can't help but wonder whether insurance groups and individual carriers are starting to think about life beyond McCarran. If the worst happens, the industry could just stick to its guns, keep sharing data and defend their cooperation in court. But that route would be costly–prohibitively so if a wayward jury concludes that carriers have harmed consumers in some way, hitting them with triple-damages.

Or they could just jettison the industry's entire standard operating procedure, with every carrier left to fend for itself. The big insurers might get along just fine, although there are bound to be some transition problems. But the smaller carriers would no doubt suffer, and some could fold under the new competitive restrictions. That would certainly not do anyone any good.

How do you all think this will come out?