The limited exemption also works to ensure consumers are protected in the worst-case scenario, by allowing enough leeway to operate state guaranty funds effectively and efficiently.

Under the regulatory regime that arose from the MFA, more than 5,000 insurers across the country are subject to a comprehensive and pervasive system of state-based laws, regulations and antitrust enforcement.

Thus, federal action to repeal or amend the partial exemption is unnecessary.

Current proposals being advanced in the Senate and House to repeal the MFA's antitrust provisions would create an inconsistent and unpredictable multi-layered morass of state and federal insurance rules. Moreover, repealing the MFA in the name of competition would almost certainly result in new regulation by the states that, ironically, would reduce competition, thus thwarting the basic purpose of the federal antitrust laws: the promotion of competition in a free-market environment.

It would also result in increasing costs while reducing the availability of some high-risk coverages, forcing small property/casualty insurance companies out of business.

It is imperative that the property/casualty insurance industry stays vigilant to stop any "creeping" of this issue into our part of the industry. A flexible and efficient market is needed to keep the industry healthy.

Lawmakers Lack Understanding

There is an enormous amount of confusion among lawmakers about what the antitrust exemption does and does not do, as well as the way state regulators strictly regulate market conduct. Not understanding that insurers rely on sharing historical loss data and common forms, many hear the words "antitrust exemption" and assume some nefarious dealings.

Whether they come from ignorance — or in the case of then-Sen. Lott, spite — NAMIC will always respond to threats to the MFA. Although the recent focus has been on health insurance, NAMIC remains strongly opposed to tampering with the limited antitrust exemption, and NAMIC's government affairs staff has been running in high gear to educate lawmakers on the importance of the limited exemption.

The association has submitted testimony and has met with elected officials and their staffs to explain what the exemption actually is and to counter misconceptions with the facts. The truth is, there's a reason why, despite all these attempts, the limited antitrust exemption hasn't been repealed. Having been through this so many times, NAMIC staff — and through our Congressional Contact Program, NAMIC members — know what we're going to hear. We've heard all the misunderstandings, the half-truths and the conspiracy theories, and we know what to explain and how to educate lawmakers and their staffers. When we can actually speak with lawmakers and explain, they usually get it.

In fact, during a hearing on the "covered agreement" negotiated by the Obama administration and the European Union, Rep. Denny Heck (D.-Wash.), based his skepticism about the agreement (shared by NAMIC) on the MFA. How could some in our industry be happy to see states preempted by an international agreement, he asked, while still opposing a theoretical federal regulator?

As more and more lawmakers understand the reality of the McCarran-Ferguson Act, fewer and fewer of them support repealing the exemption. It would be nice if it stayed that way, but we have elections, and thus new lawmakers, and one of them is bound to have the same knee-jerk response when hearing the term "antitrust exemption" for the first time.

When it happens, NAMIC will be ready, as we have been every time.