GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

July 28, 2005 

The Honorable Michael G. Oxley 

Chairman 

Committee on Financial Services 

House of Representatives 

Subject: Ultimate Effects of McCarran-Ferguson Federal Antitrust Exemption on 

Insurer Activity are Unclear 

This letter transmits to you our briefing slides describing the potential effects of the 

federal antitrust exemption included in the McCarran-Ferguson Act (McCarran)1

 on 

insurer activities. On May 26, 2005, we briefed committee staff on the results of our 

review. Specifically, we assessed existing insurance practices that might violate 

federal antitrust law absent the McCarran exemption and identified current state 

authorities related to antitrust laws applicable to insurance. In a separate GAO legal 

opinion, Legal Principles Defining the Scope of the Federal Antitrust Exemption for 

Insurance, published in March 2005, we assessed the types of insurance-related 

activities that courts have found to be exempt from federal antitrust provisions under 

the McCarran exemption.2 

We focused our analysis on property/casualty insurance, including workers 

compensation, because insurers in these areas participate in many joint activities. We 

consulted relevant literature, including prior congressional and state hearings on the 

topic, and met with experts from state insurance departments, attorneys general 

offices, insurance companies, trade associations, rating organizations, law firms, and 

academia. We met with knowledgeable staff at the National Association of Insurance 

Commissioners, the Department of Justice, and the Federal Trade Commission. We 

limited our review of states’ insurance regulation and antitrust authorities to five 

states with large insurance markets that had varying degrees of rate regulation and 

differences in state antitrust exemptions—California, Illinois, New Jersey, New York, 

and Texas. We conducted our work from February 2005 through July 2005 in 

accordance with generally accepted government auditing standards. 

 

1

Pub. L. No. 79-15, ch. 20, 59 Stat. 33, codified as amended at 15 U.S.C. §§ 1011-1015. 

2

GAO, Legal Principles Defining the Scope of the Federal Antitrust Exemption for Insurance, B304474 (Washington, DC: March 4, 2005). 

United States Government Accountability Office

Washington, DC 20548 
2 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

Background 

Congress passed the McCarran-Ferguson Act (McCarran) in 1945, following a 

Supreme Court decision that determined that insurance is interstate commerce which 

Congress could regulate and subject to federal antitrust laws.3 McCarran reaffirmed 

the power of the states to regulate and tax insurance companies and exempted 

certain insurance practices from federal antitrust laws, including the Sherman, 

Clayton, and Federal Trade Commission Acts. The insurance exemption applies to 

those activities that (a) constitute the “business of insurance;” (b) are “regulated by 

State law;” and (c) do not constitute an agreement or act “to boycott, coerce, or 

intimidate.” Our legal opinion discusses court decisions concerning the types of 

activities covered by the exemption. Among other things, the courts have found that, 

generally speaking, joint rate-making among property/casualty insurers is the 

“business of insurance” and thus exempt from federal antitrust laws under McCarran. 

Besides McCarran, there are other, more general sources of immunity from federal 

antitrust laws, including the state action doctrine and the Noerr-Pennington 

Doctrine. The state action doctrine allows for anticompetitive conduct provided that 

the conduct is both (a) part of a clearly articulated policy by a state to displace 

competition in a regulated area and (b) actively supervised by state regulators with 

statutory authority to review the conduct. The Noerr-Pennington Doctrine provides 

immunity for certain joint efforts by competitors to petition the government. Both of 

these immunities may be applicable to insurance. States also have their own antitrust 

authorities, which may or may not include exemptions for insurance. 

Effects of McCarran Exemption Uncertain, but without the Exemption Some 

Insurer Activities Could Raise Antitrust Concerns 

Because the courts have not considered which activities within the “business of 

insurance” might violate federal antitrust laws, it is difficult to determine which 

insurer activities would withstand antitrust scrutiny if the exemption were removed. 

Decisions involving antitrust law are typically based on the facts and circumstances 

of each case. With insurance activities, if the court decides that the McCarran 

exemption applies, it generally conducts no further analysis of the activities. Unsure 

about how courts would decide insurance cases, when eliminating or proposing to 

eliminate antitrust immunities, legislators at both the state and federal levels have 

included “safe harbors” for certain insurance activities such as the collection of 

historical data.4

 

Some experts have suggested that absent the McCarran exemption, activities in the 

property/casualty area, especially joint rate-making, might violate federal antitrust 

 

3

See United States v. Southeastern-Underwriters Ass’n, 322 U.S. 533 (1944). 

4

California’s Proposition 103, codified at Cal. Ins. Code §§ 1861 et seq., had “safe harbors” embedded in 

its repeal of the state antitrust exemption for insurance, and congressional proposals to modify the 

McCarran exemption under the Insurance Competitive Pricing Act of 1994, H.R. 9, as amended, 103d 

Congress (1994), also carved out certain activities to avoid further litigation in these areas. 
3 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

laws, citing concerns over the collective projection of insurer losses into the future. 

To price insurance policies, property/casualty insurers need to project loss costs—

the amount insurers use to cover claims and the costs of adjusting those claims—into 

the future. Projecting loss costs requires large amounts of data on historical losses 

and actuarial expertise, and single insurers are not likely to have sufficient data or 

expertise in all of the insurance lines they sell. Thus, for a significant portion of ratemaking, property/casualty insurers rely on rating organizations.5

 Rating organizations 

standardize risk classifications and products to facilitate the gathering and 

aggregation of data on past losses and their costs. Then, they bring this historical data 

up to the present by estimating loss costs for events that have occurred but have not 

yet been reported. Finally, rating organizations issue “advisory prospective loss 

costs” by projecting loss costs into the future. They do this by trending—analyzing 

past data trends and using actuarial judgment about the future. 

According to industry representatives, regulators, and other experts, this rate-making 

process has certain benefits, but also raises antitrust concerns. Generally, they 

believe the process reduces the costs associated with pricing and regulating 

insurance, makes it easier for new firms to enter the insurance market, and allows 

consumers to better compare products. However, some experts believe that under 

some circumstances joint trending might constitute price fixing absent the McCarran 

exemption, and that standardized risk classifications and products might restrict new 

insurers or products from entering the market, thus limiting innovation, consumer 

choice, and competition. Further, according to most experts, courts are more likely 

to find joint trending a violation of federal antitrust laws than the joint collection of 

historical data. 

For some, the McCarran exemption raises the issue of insurance industry 

uniqueness—that is, whether insurance warrants a federal antitrust exemption that 

most other industries do not have. Some industry representatives said that insurance 

is different from other industries because when it is sold the insurer does not know 

what the cost of a policy will be. In addition, insurer insolvencies can pose significant 

social costs. Some state regulators told us that lack of certainty about future costs 

leads some insurers to underestimate their future costs and significantly underprice 

their policies, potentially leading to costly insolvencies. They said that joint ratemaking provides more information and greater certainty to insurers. Other experts 

have suggested that insurance is not unique and that other industries—such as 

banking— face uncertainty about future costs, but do not have antitrust immunity. 

 

5

States authorize rating organizations, sometimes called statistical or advisory organizations, to assist 

in the rate-making process. Nationally, two of the largest rating organizations are the Insurance 

Services Office in personal and commercial lines and National Council on Compensation Insurance in 

workers compensation.
4 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

Application of State Antitrust Authorities to Insurance Varied Across the 

Five States We Visited 

Although insurance is immune from federal antitrust laws, insurers in the states we 

visited were subject to state antitrust and related authorities to varying extents. In 

New York, property/casualty insurers’ rate-making activities are exempt from the 

state antitrust laws, but the insurance code prohibits insurers from participating in 

unfair methods of competition. In Texas, where certain other regulated industries 

have exemptions, insurance has no general antitrust immunity. California and New 

Jersey both had periods of time in the late 1980s and 1990s when they prohibited 

insurers from joint trending in some lines of insurance.6 However, state officials do 

not view these periods as valid experiments of how an insurance market would 

behave absent McCarran because of other factors influencing the market at that time. 

In addition, we also found that all five states had some provisions in their codes to 

prohibit insurers from engaging in unfair or deceptive acts or practices in their states. 

The states we visited also regulated property/casualty insurance rates to varying 

degrees. For example, California requires prior approval for many of its rates, while 

Illinois relies on the market to determine most rates. The degree of state rate 

regulation could have significant effects on the applicability of federal antitrust laws 

to insurance if the McCarran exemption were amended or repealed. In those states 

that actively regulate and enforce rates, insurers might seek and might be granted 

immunity from federal antitrust laws under the state action doctrine in the absence 

of the McCarran exemption. 

As agreed with your office, unless you publicly announce its contents earlier, we plan 

no further distribution of this report until 30 days after its date. At that time, we will 

send copies of this report to the Chairman and Ranking Minority Member of the 

Senate Committee on Banking, Housing, and Urban Affairs and the Ranking Minority 

Member of the House Committee on Financial Services. We will also make copies of 

this report available to other interested parties and others upon request. In addition, 

it will be available on GAO's home page at http://www.gao.gov. If you or your staff 

have questions regarding this report, please contact me at (202)-512-8678 or 

hillmanr@gao.gov. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this report. Lawrence D. Cluff, Nancy 

S. Barry, Katherine C. Bittinger, and Tania L. Calhoun made key contributions to this 

report. 

Sincerely yours, 

Richard J. Hillman 

Director, Financial Markets and Community Investment 

Enclosure

 

6

In New Jersey, the state passed legislative changes only for the personal auto market. 
Enclosure 

5 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

McCarran-Ferguson Antitrust 

Exemption

Briefing for 

Committee on Financial Services

House of Representatives

May 26, 2005
Enclosure 

6 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 2

Overview

• Background

• Federal antitrust laws whose application is affected by the 

McCarran-Ferguson (McCarran) exemption

• Other possible sources of federal antitrust immunity

• State antitrust authorities

• Insurance activities that might require McCarran exemption

• Insurance regulation and antitrust authorities in selected 

states
Enclosure 

7 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 3

Scope and methodology

• Scope

• Restricted to property/casualty and workers compensation

• State analysis primarily in 5 states – California, Illinois, New 

Jersey, New York, and Texas

• Methodology

• Review of literature including congressional hearings, 

Department of Justice (DOJ) studies, and American Bar 

Association (ABA) documents.

• Interviews with staff at state insurance departments, attorneys 

general offices, the National Association of Insurance 

Commissioners (NAIC), trade associations, and insurance 

companies, and with legal experts and academics.
Enclosure 

8 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 4

Background: Federal antitrust laws

• The Sherman Act

• Section 1: concerted acts or practices in restraint of trade

• Section 2: monopolization

• The Clayton Act

• Mergers and acquisitions that may substantially lessen 

competition or tend to create a monopoly

• Interlocking directorates

• The Federal Trade Commission (FTC) Act 

• Unfair methods of competition 

• Unfair or deceptive acts or practices 
Enclosure 

9 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 5

Background: Court analysis under Section 1 

of Sherman Act when exemptions don’t apply 

• Some types of restraints are considered per se unreasonable 

and can be presumed illegal without inquiry into their purpose 

or competitive harm. These include 

• Price fixing

• Market or customer allocation

• Group boycotts

• Other types of restraints are considered under the rule of 

reason, which requires analysis of the circumstances to see if 

the conduct promotes or suppresses competition. These 

include joint venture arrangements.

• According to DOJ, while technically illegal per se, tying is 

usually considered under the rule of reason.
Enclosure 

10 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 6

Background: Prerequisites for statutory 

McCarran exemption

• Practices must constitute the “business of insurance.”

• Practices must be “regulated by State law.”

• Practices must not constitute agreements or acts of boycott, 

intimidation, or coercion.

See GAO, Legal Principles Defining the Scope of the Federal Antitrust Exemption for Insurance, 

B-304474 (Washington, DC: March 4, 2005) for more information on the prerequisites.
Enclosure 

11 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 7

Background: Some sources of federal 

immunity other than McCarran

• State Action Doctrine - Shields certain anticompetitive 

conduct when that conduct is part of a clearly articulated 

state policy and actively supervised by the state.

• Clear articulation requirement is met if the state clearly intends 

to displace competition in an area with a regulatory structure.

• Active supervision requirement is met if state regulators have 

and exercise statutory authority to review the conduct. 

• Noerr-Pennington Doctrine - Shields certain joint efforts by 

groups, such as trade associations and industry groups, 

seeking to exercise their First Amendment rights to petition 

the government. 
Enclosure 

12 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 8

Background: State antitrust authorities

• According to legal experts, states exempt insurance practices from state antitrust laws in a variety of ways: 

• by exempting specific insurance activities or products,

• by broadly incorporating federal exemptions into state law, and

• by exempting regulated industries including insurance.

• In recent years, some states have narrowed their 

exemptions.

• States have other authorities for targeting practices that 

might violate federal antitrust laws, including

• statutory provisions specific to the insurance industry, and 

• generally applicable unfair or deceptive practices statutes.
Enclosure 

13 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 9

A cautionary note

• Application of the federal antitrust laws through court cases is

highly dependent on the facts and circumstances of each 

case.

• Because the McCarran exemption exists, the application of 

federal antitrust laws to insurance activities has not been fully 

tested in the courts.

• As a result, it is difficult to reach firm conclusions about the

application of the federal antitrust laws to insurance activities.
Enclosure 

14 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 10

Insurance activities that might require 

McCarran exemption

• Joint rate development

• Risk classification 

• Product (form) standardization

• Loss costs

• Others

• Joint underwriting 

• Marketing and distribution
Enclosure 

15 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 11

Joint rate development: Rating/statistical 

organizations play a major role

• Establish risk classifications and develop policy forms 

• Take actions to ensure that data are reliable

• Aggregate historical data on loss costs

• Develop loss costs for events that have occurred but have not yet 

been reported

• Trend loss costs to provide advisory prospective loss costs, 

including

• analyzing past trends to project them into the future, and

• using other information such as economic forecasts, perceptions of judicial temperament, and expected changes in 

medical costs to further refine their projections.

• In some workers’ compensation areas, such as residual markets, 

add expenses, taxes, and profits onto prospective loss costs to 

produce rates. 
Enclosure 

16 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 12

Joint rate development: Types of 

rating/statistical organizations

• Organizations specialize.

• Property/Casualty

• Workers’ compensation

• Organizations can be national, regional, or local.

• According to NAIC, there are 25 rating/statistical 

organizations. 

• The rating/statistical organizations are licensed in the 

states where they provide services.
Enclosure 

17 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 13

Joint rate development: Rating/statistical 

Organizations - Property/Casualty

• Insurance Services Office (ISO) is the major national rating organization for property/casualty insurance

• Prior to 1994 owned and operated by insurers

• Current structure and operations

• For profit

• Employees, managers, and directors hold class A stock and elect 10 of 14 directors

• Insurers hold class B stock and elect 3 of 14 directors

• Members provide data

• For personal lines, 35 percent of the market

• For commercial lines, 60-65 percent of the market

• Members also provide advice and use forecasts

• Other rating/statistical organizations operate nationally or regionally and provide varied services
Enclosure 

18 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 14

Joint rate development: Rating/statistical 

Organizations - Workers’ Compensation

• National Council on Compensation Insurance (NCCI) is the only multistate organization

• Not for profit

• 14 member board, about 2/3 represent insurers

• Provides some services in 38 states

• Members provide data and advice and use forecasts

• Provides residual market services and administers 

National Workers Compensation Reinsurance Pool

• Some states have their own organizations; however, NCCI 

provides some services in several of these states. 
Enclosure 

19 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 15

Possible benefits of this process identified by 

industry, regulators, and experts

• Standardized risk classifications and forms make data more 

credible. 

• One or a few organizations collecting and analyzing data reduces costs (economies of scale) and improves quality of 

analysis.

• Advisory loss costs and forms make it less costly to enter new markets.

• Standardized forms lower legal costs because the language has been tested in the courts and may facilitate risk sharing.

• Advisory loss costs and standardized forms lower regulatory costs for filing rates and forms for both insurers and 

regulators.

• Standardized risk classifications and forms facilitate product comparisons for consumers.
Enclosure 

20 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 16

Possible Issues: Standardized risk 

classifications and forms

• While standardization exists in other industries, legal experts 

have said that product standardization in insurance may have 

a greater impact on price than it has in other industries and 

may thus be subject to antitrust litigation. 

• Standardized risk classifications and policy forms may limit

• Consumer choice,

• Competition, and

• Innovation.

• Standardized risk classifications and policy forms have social 

implications.
Enclosure 

21 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 17

Possible Issues: Loss costs

• Collection of historical loss costs and loss development

• Legal experts have said that these activities may not violate federal antitrust laws in the absence of McCarran.

• Do not in themselves constitute price fixing

• May make the market more competitive and efficient 

• However, court outcomes are uncertain

• Joint trending to develop advisory, prospective loss costs

• Legal experts have said that these activities may violate federal antitrust laws in the absence of McCarran.

• Collective activity establishes a significant portion of final insurance price.

• Although advisory, sends strong pricing signal to market participants.

• Relativities constitute element of price fixing.

• While many legal experts believe potential for collusive behavior outweighs potential for increased efficiency, some experts believe the 

activity is procompetitive.

• A dominant trending organization may lead to inaccurate pricing and limit innovation.
Enclosure 

22 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 18

Other Possible Issues

• McCarran exemption is broad relative to almost all other antitrust exemptions, which raises questions about the 

uniqueness of property/casualty insurance 

• Industry experts say unique because of

• Uncertainty about costs at time product is sold 

• Long time horizon

• Insolvency has social costs

• Some experts do not think that it is so unique as to require federal antitrust exemptions that most other industries do not have.

• Court determinations in non-insurance antitrust cases often 

depend on whether market participants have power to exert 

control over the market. 

• Because of exemption, insurance has not been subjected to competitive or unfair practices analysis by federal antitrust agencies

• NAIC, some states, and academic experts have done limited competitive analyses
Enclosure 

23 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 19

Some sources of federal immunity other than 

McCarran

• Joint rate and form activities might still be immune from 

federal antitrust laws under state action doctrine

• Statutes or regulations would need to specify or imply that 

these regulations are replacing a competitive (market) regime. 

If firms independently set final rates, questions might be raised 

concerning this requirement.

• States would need to supervise and enforce rate and form 

regulations.

• The state action doctrine was argued in in re Insurance 

Antitrust Litigation. 

• To the extent that insurers’ applications to states for specific

rate and form regulation can be seen as petitioning the state, 

the Noerr-Pennington Doctrine might apply.
Enclosure 

24 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 20

Other activities that might require McCarran 

exemption 

• Joint Underwriting

• To extent that activities are efficiency-producing and not related 

to price fixing, they are not likely to violate federal antitrust laws 

in the absence of McCarran.

• DOJ/FTC have guidelines to evaluate extent to which joint 

ventures would violate antitrust laws.

• Recognizes that collaboration can be procompetitive

• Only agreements “of a type that always or almost always 

tends to raise price or reduce output” are per se illegal.

• Marketing and Distribution

• To extent that insurer-agent activities constitute tying they might 

violate federal antitrust laws in absence of McCarran
Enclosure 

25 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 21

Types of joint underwriting activities

• Residual markets

• Assigned risk plans

• Joint Underwriting Associations

• Pools

• Aviation

• Nuclear

• Ad hoc arrangements

• Information joint ventures to prevent fraud

• Medical information bureaus

• Fire losses 
Enclosure 

26 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 22

Types of marketing and distribution activities

• Agreements among agents or among insurers such as those 

related to commissions

• Agreements among insurers and independent agents

• Exclusive agent relationships, where an agent agrees to 

represent only one insurer

• Agreements restricting agents to certain products, 

territories, or customers

• Agreements related to agent terminations

• Bundling of products (coverages) 
Enclosure 

27 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 23

Regulation in five states: rate regulation 

Commercial: no filing required File & use

Personal: use & file 

Illinois

Texas File & use File & use

Prior approval: state rating 

organization

Personal auto: prior approval

Commercial liability: flex between bands 

Other: file &use

New York

Prior approval: state rating 

organization

Commercial: Use & file unless find that 

competition does not exist

Personal: prior approval

New Jersey

California Prior approval File & Use: state rating organization

State Property/Casualty Workers’ compensation 

Source: NAIC and state regulators in the 5 states
Enclosure 

28 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 24

Regulation in five states: antitrust

Exempts activities that are subject to regulation 

by the Director of Insurance or permitted or 

authorized by state law 

Illinois Illinois Antitrust Act

No general immunity; Immunity for activities 

required by state or federal law. Free Enterprise and 

Antitrust Act 

Texas

Exempts activities covered by New York’s 

insurance code regulating property/casualty rates

New York Donnelly Act

Exempts activities subject to supervision by 

commissioner or authorized by state law New Jersey New Jersey Antitrust Act

Exemption only for collection of historical data, 

joint trending by rating organizations, and joint 

arrangements to ensure availability of insurance

California Cartwright Act

State State antitrust law Insurance exemption

Source: GAO
Enclosure 

29 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 25

Regulation in five states: Other related state 

authorities 

Consumer Fraud and Deceptive Business Practices Act 

Insurance code provisions for unfair methods of competition and unfair or deceptive 

acts and practices

Illinois

Deceptive Trade Practices-Consumer Protection Act 

Insurance code provisions for unfair methods of competition and unfair or deceptive 

acts or practices

Texas

Executive law, general business law, and insurance law provisions proscribing 

repeated fraudulent or illegal acts, restraints of trade and unfair competition, and 

deceptive acts or practices.

New York

Insurance code provisions for unfair methods of competition or unfair or deceptive acts 

or practices

New Jersey

Unfair Practices Act

Unfair Competition Law

Unfair Insurance Practices Act

California

State Other related authorities

Source: ABA, State Antitrust Practice and Statutes, 3rd edition, and state officials in the 5 states
Enclosure 

30 GAO-05-816R McCarran-Ferguson Federal Antitrust Exemption 

May 26, 2005 Antitrust 26

Summary and conclusions

• As noted, it is difficult to reach firm conclusions about the 

application of federal antitrust laws to insurance activities because 

often the courts have not considered these issues.

• Over the years, most experts have said that collection of historical 

data would likely not violate federal antitrust laws absent McCarran; 

however, they are less certain that courts would find joint trending 

to be consistent with federal antitrust law absent McCarran.

• Because of the uncertainty about what the courts will do, “safe 

harbors” for certain activities such as the collection of historical data 

have often been used when eliminating or proposing to eliminate 

immunities for insurance at the state and federal levels.

• Generally, larger carriers expressed less concern about maintaining 

the McCarran exemption than smaller carriers. 

(250229) 
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