85R20232 BPG-D
By: Zedler H.C.R. No. 120
CONCURRENT RESOLUTION
WHEREAS, Antitrust laws are crucial to ensure that the free
market works for consumers, but the McCarran-Ferguson Act of 1945
created a special exemption from federal antitrust laws for
insurance companies; and
WHEREAS, In 1944, the Supreme Court's decision in United
States v. South-Eastern Underwriters clarified that the business of
insurance is interstate commerce and subject to existing antitrust
laws; the following year, Congress responded by hurriedly passing
the McCarran-Ferguson Act, which permitted state regulation of
insurance companies; a section of the act was also crafted to
provide insurers with a three-year moratorium during which they
could study federal antitrust laws and adjust their practices to a
competitive marketplace; however, a seemingly innocuous phrase
inserted in the bill in conference committee was later interpreted
by the courts such that the temporary delay became broad, permanent
immunity, completely contrary to the intent understood by all,
including President Franklin Roosevelt, who specifically discussed
the limited moratorium upon signing the act; and
WHEREAS, The exemption from antitrust laws has allowed
insurance companies to collude to drive up prices, share or divide
markets, restrict coverage, and reduce payouts; some lines of
insurance, including property and casualty insurance, have formed
cartel-like rating bureaus that collect and pool claims data from
different companies, enabling them to engage in joint
price-setting, joint policy-language development, and the use of
the same or similar computer programs designed to systematically
underpay claims; health insurers have banded together to share
pricing information, and premiums have soared sharply while doctors
and hospitals are underpaid; and
WHEREAS, Unfettered by antitrust regulations, a handful of
insurers have so dominated their markets that consumers have little
or no choice in providers; more than 90 percent of health insurance
markets in more than 300 metropolitan areas have become "highly
concentrated," as defined by the Federal Trade Commission,
according to the American Medical Association; a 2008 survey by the
Government Accountability Office found the five largest providers
of small group insurance controlled 75 percent or more of the market
in 34 states, while in 23 of those states, they controlled 90
percent or more of the market; and
WHEREAS, Competition is the cornerstone of our economic
system, but for nearly seven decades, the insurance industry's
singular immunity from antitrust laws has allowed excessive
corporate concentration to distort the marketplace; ending this
special treatment would check monopolistic practices, spurring
competition that would improve coverage and expand choices while
bringing down costs for American consumers and businesses; now,
therefore, be it
RESOLVED, That the 85th Legislature of the State of Texas
hereby respectfully urge the United States Congress to end the
antitrust exemption for insurers; and, be it further
RESOLVED, That the Texas secretary of state forward official
copies of this resolution to the president of the United States, to
the president of the Senate and the speaker of the House of
Representatives of the United States Congress, and to all the
members of the Texas delegation to Congress with the request that
this resolution be entered in the Congressional Record as a
memorial to the Congress of the United States of America.