FTC - Congress - Life Insurance

  • 1986 0121 0122 - GOV (House) - The Liability InsuranceCrisis - [PDF-553p-GoogIePIay VIDEO-?]
    • NICO - J. Robert Hunter, president, National Insurance Consumer Organization - p279-299
    • WHAT SHOULD CONGRESS DO?
    • First, it should subject the insurance industry to the anti-trust laws, thus preventing insurers from acting in concert to raise prices.
      • Since 1944, the McCarran-Ferguson Act has allowed insurance companies to fix prices  while price-fixing in other industries is punishable by three years in jail.
      • We specifically propose a two- year sunset provision during which time the insurers, the states and the federal government can prepare for the change.
    • Second, it should create a federal office of insurance to monitor the industry and establish standards for state regulators to follow
      • . Although insurance is a national, $310 billion business, accounting for 12% of our gross national product -- more than any other item except food and housing -- only the states regulate the insurance industry.
      • Because state insurance commissions are often under-staffed (half the states have no actuaries to analyze rate filings) and have a "revolving door" relationship with the industry (state insurance commissioners typically come from and return to the industry), state regulation has not always protected the public.
    • Third, Congress should repeal the insurance industry's exemption from Federal Trade Commission jurisdiction.
      • In 1979, after the FTC published a study critical of the life insurance industry , Congress prohibited the FTC from ever again studying -- let alone prosecuting -- any sector of the industry.
      • There is no principled justification for this exemption .
  • 1987 0421, 0428, and 0429 - GOV (House) - Current State of the Liability Insurance Crisis
    • [PDF- 313p-GooglePlay, VIDEO-?]
    • Testimony - FTC - Daniel Oliver, Chairman of the FTC - p242-260
    • Letter - FTC to GOV - p290-291
      • Chairman La Falce has requested information on the circumstances that led to enactment of the 1980 amendment to the Federal Trade Commission Act that prohibits the Commission from studying the business of insurance .
    • (p288) - Chairman LAFALCE. All right, fine. I would also like you to supply for the record, a statement as to why the FTC believes it lost its authority in 1980, that is, what was the FTC doing in that era?
      • Mr. OLIVER. I am told that it resulted from a study that the Commission did on how good an investment life insurance was, the staff study.
        • I understand that it was a staff study that concluded that buying life insurance was not a good investment.
      • Chairman LAFALCE. The insurance industry did not like that, and therefore they got enough Members of Congress to support their position.
      • Mr. OLIVER. I think that is correct.
    • House - Committee on Small Business