On August 2, 2010, United States Senators Mark Pryor (Ark.-D) and John D. Rockefeller IV (W.V.-D) introduced the Insurance Competition and Transparency Act of 2010 (S. 3685), which will remove restrictions on the Federal Trade Commission’s (the “FTC”) authority to review market activity in the insurance industry. S. 3685 was referred to the Senate Commerce, Science and Transportation Subcommittee on Consumer Protection, Product Safety and Insurance.
According to the senators’ press releases, if passed into law, S. 3685 will allow the FTC to “investigate and disclose information about practices employed by insurance companies that may reduce competition in the marketplace.” Senator Rockefeller has stated that S. 3685 “will complement the recently passed comprehensive health reform law by helping to make sure affordable, comprehensive health insurance options are available to all of our hardworking . . . American families.” Similar legislation was proposed earlier this year, but failed to make it into the final healthcare reform bill as discussed here, here, and here.
Notwithstanding the McCarran–Ferguson Act (15 U.S.C. §§ 1011-1015), the Insurance Competition and Transparency Act of 2010 would “give the FTC the freedom to conduct studies, prepare reports, and release information relating to insurance companies without first receiving a written request from the Senate Commerce or House Energy and Commerce Committees.”
Specifically, S. 3685 strikes the following subsection (l) from Section 6 of the Federal Trade Commissions Act (15 U.S.C. § 46):
Nothing in this section (other than the provisions of clause (c) and clause (d)) shall apply to the business of insurance, except that the Commission shall have authority to conduct studies and prepare reports relating to the business of insurance. The Commission may exercise such authority only upon receiving a request which is agreed to by a majority of the members of the Committee on Commerce, Science, and Transportation of the Senate or the Committee on Energy and Commerce of the House of Representatives. The authority to conduct any such study shall expire at the end of the Congress during which the request for such study was made
and replaces it with:
Notwithstanding the Act of March 9, 1945 (15 U.S.C. 1011 et seq.) and the definition of corporation in section 4, the Commission may use the authority described in this section to conduct studies, prepare reports, and disclose information relating to insurance, without regard to whether the subject of the study, report, or the information is for-profit or not-for-profit.
Subject to the Act of March 9, 1945 (15 U.S.C. 1011 et seq.) and notwithstanding the definition of corporation in section 4, the provisions of this Act shall apply to an insurer without regard to whether such insurer is for-profit or not-for-profit. For purposes of this paragraph, an employer or membership organization not organized for its own profit or that of its members that provides health care or medical malpractice benefits only to its employees or members shall not be deemed to be a health insurer or a medical malpractice insurer, provided that this exclusion shall not apply to a separate entity that issues insurance or to an organization whose sole or primary membership benefit is insurance.