The Antitrust Modernization Commission (AMC) met on January 11, 2007, to discuss recommendations for congressional and presidential action in 2007 on antitrust issues. A draft report containing preliminary recommendations was prepared in preparation for the meeting. To a large extent, the commission adopted the draft recommendations.
Importantly for insurers, while the commission recommended rigorous standards for granting any statutory antitrust exemption (including for regulated industries), it did not single out any industry-specific antitrust exemption for repeal, including the antitrust exemption in the McCarran-Ferguson Act for the business of insurance regulated by the states. This differs sharply from the recommendations of an earlier governmental commission, which explicitly recommended repeal of the current McCarran exemption, to be replaced by defined antitrust safe harbors.
Rather, the commission focused on the general principle that a statutory antitrust exemption ought only be granted rarely and after a legislative judgment that the exemption is unavoidable because of a market failure or some other overriding public purpose. Thus, if the House or Senate judiciary committees hold McCarran hearings, there will be enough in the commission's report for both sides to point to, but the anti-McCarran forces will be deprived of an important weapon they have been able to use in prior years -- official governmental support for repeal of the McCarran exemption.
Perhaps even more importantly for insurers was the commission's strong support for the elimination of price regulation, generally, and its finding that the elimination of price regulation would further consumer welfare. This conclusion could have an impact on the upcoming debates concerning the proposed optional federal chartering bills, and is certain to be cited by the advocates of the optional federal chartering bills.
As noted, the recommendations and conclusions of the commission remain preliminary until an official report is issued. The official report may have a significant impact in the debate over the proposed legislation. A copy of the AMC's preliminary report is available on its website at www.amc.gov.