Congress Readies to Act on Regulation Reform

By Myers, Robert H. | Risk Management, June 1991 | Go to article overview

Congress Readies to Act on Regulation Reform

Myers, Robert H., Risk Management

Conventional wisdom in Washington is that Congress is more likely to intervene in insurance regulation during the current session than at any time in the last 50 years. Indeed, economic and political indicators point to just such an eventuality. However, it is ultimately up to the industry as to whether Congress intervenes or steers clear of the regulation controversy

This is not the first time Congress has attempted to wrest from the states their exclusive jurisdiction over insurance regulation. Since the McCarran-Ferguson Act was passed in 1945, opponents have sought its repeal. In the 1960s senators Warren Magnuson, D-WA, and Thomas Dodd, D-CT, proposed establishing a federal guaranty fund. In the 1970s Sen. Edward Brooke, R-MA, proposed establishing "dual regulation," the opportunity to obtain a federal charter and federal regulation as an alternative to state regulation. That proposal looks strikingly similar to the much-maligned structure of banking regulation today.

There was also a move for federally imimposed no-fault insurance, and in the early 1980s "unisex" rating, which many thought had an excellent chance of passing, was heavily pushed. In 1981 the Product Liability Risk Retention Act was passed to help captives respond to a perceived shortage of product liability insurance. In 1986 Congress expanded that act to include all liability coverages.

Despite ongoing discussions, little progress has been made in providing a role for the federal government. However, two major issues -amending or repealing the McCarranFerguson Act and solvency regulation-have come to the fore, giving proponents of change cause for optimism.

In the 101st Congress, the House Judiciary Committee for the first time reported out favorably a bill to amend McCarran-Ferguson. The bill's sponsor, Rep. Jack Brooks, D-TX, chairman of the judiciary Committee, introduced similar legislation in the 102nd Congress. The bill would prohibit specific activities, including price fixing, market allocation, tying arrangements and monopolization.

However, the bill is being criticized on the basis that it would limit the industry more than the complete repeal of the act. In addition, due to its vagueness, the bill's passage would produce endless litigation and deter joint industry activities that benefit consumers and the industry. As far as repealing the act, the Senate judiciary Committee in the 101st Congress was unable to act on the proposal of the principal sponsor of repeal, Sen. Howard Metzenbaum, DOH. This year the senator introduced legislation that mirrors Rep. Brooks', a move that should facilitate its progress.

Regarding solvency regulation, Rep. John Dingell, D-MI, chairman of the House Energy and Commerce Committee, intends to introduce legislation designed to improve solvency regulation through the development of a national regulatory body. He recently circulated a discussion outline defining a possible federal role in insurance regulation. The outline includes the following proposals: preempting the states' regulations regarding surplus lines and reinsurance companies; federal minimum solvency standards, including federal accreditation of state insurance departments; a federal insurance fraud statute; federal liquidation of insolvent insurers; and possible authorization of a federal agency to supervise state regulation or a self-regulatory group.

Factors Favoring Change

Since Congress responds to economic and political pressures, which are both intertwined in insurance regulation, a good case can be made that such pressures will push Congress to act on McCarran-Ferguson or solvency reform, or both. A prime economic factor is the pressure that can be brought to bear on Congress due to market cycle swings in the insurance industry. Although the life/health segments of the market may not operate economically in conjunction with the property/casualty side, voters may not heed the difference. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

Congress Readies to Act on Regulation Reform


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.