P&C brokers are being told to pay attention to the potential repeal of an antitrust exemption that could limit the sharing of risk data.
The Independent Insurance Agents & Brokers of America (IIABA) describes the House of Representatives’ proposed repeal of the McCarran-Ferguson exemption applying to health insurers as a “slippery slope” for property and casualty insurers.
Federal insurance lawyer for the IIABA, Jennifer Webb said the P&C industry got spooked when the House of Representatives entertained an amendment involving medical malpractice. Proponents of the repeal argue insurance companies are being allowed to benefit from product cooperation without facing competition, keeping prices high for policyholders.
However, the advocates are focused on the health market and Webb argues P&C product data sharing benefits small players, encouraging competition.
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“What McCarran-Ferguson allows insurers to do is communicate in a way they normally wouldn’t be able to, as it gives small and mid-sized insurers the ability to pool data and get data from the large insurers. It actually makes it more competitive,” Webb said.
Webb explained that policy development is also shared among different sized insurers, allowing small players to stay in the game with innovations like cyber coverage.
“It (McCarran-Ferguson) allows the small insurers to have a more level playing field and access to claims data, so they need to accurately price their products,” he explained. “The other thing it does in the property and casualty space is that we have policy forms that might be consistent across jurisdictions - so it lets insurers communicate.”
That’s why Webb and the IIABA are warning their members about the knock-on effects from health legislation on P&C.
“You want to make sure it doesn’t trickle down and have a negative effect on state regulations generally,” Webb said.
“Insurers are still subject to state regulations and to any antitrust or anticompetitive laws.”
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