I

103D CONGRESS

2D SESSION H. R. 9

To modify the antitrust exemption applicable to the business of insurance.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. BROOKS introduced the following bill; which was referred to the

Committee on the Judiciary

JUNE 2, 1994

Additional sponsors: Mr. EDWARDS of California, Miss COLLINS of Michigan,

Mr. KOPETSKI, and Mr. JOHNSTON of Florida

A BILL

To modify the antitrust exemption applicable to the business

of insurance.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Insurance Competitive

5 Pricing Act of 1993’’.

6 SEC. 2. AMENDMENTS.

7 Section 2 of the Act of March 9, 1945 (59 Stat. 34;

8 15 U.S.C. 1012), commonly known as the McCarran-Fer9 guson Act, is amended—
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1 (1) in subsection (b)—

2 (A) by striking ‘‘: Provided, That after

3 June 30, 1948,’’ and inserting ‘‘, except that’’,

4 (B) by inserting ‘‘section 5 of’’ after

5 ‘‘Clayton Act, and’’,

6 (C) by inserting ‘‘as such section 5 relates

7 to monopolies, attempts to monopolize, and un8 lawful restraints of trade,’’ after ‘‘Commission

9 Act, as amended,’’, and

10 (D) by striking ‘‘that such business’’ and

11 all that follows through ‘‘law.’’ and inserting

12 the following:

13 ‘‘that—

14 ‘‘(1) such business is not regulated by State

15 law; or

16 ‘‘(2) the conduct of a person engaged in such

17 business involves—

18 ‘‘(A) price fixing;

19 ‘‘(B) allocating with a competitor a geo20 graphical area in which, or persons to whom,

21 insurance will be offered for sale;

22 ‘‘(C) unlawfully tying the sale or purchase

23 of—
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1 ‘‘(i) one type of insurance to the sale

2 or purchase of another type of insurance;

3 or

4 ‘‘(ii) any type of insurance to the sale

5 or purchase of any other service or prod6 uct; or

7 ‘‘(D) monopolizing, or attempting to mo8 nopolize, any part of the business of insur9 ance.’’, and

10 (2) by adding at the end the following:

11 ‘‘(c) The conduct referred to in subsection (b)(2)

12 shall not include making a contract, or engaging in a com13 bination or conspiracy—

14 ‘‘(1) to collect, compile, or disseminate histori15 cal loss data;

16 ‘‘(2) to determine a loss development factor ap17 plicable to historical loss data; or

18 ‘‘(3) to perform actuarial services if such con19 tract, combination, or conspiracy does not involve a

20 restraint of trade.

21 ‘‘(d) During the transition period, the conduct re22 ferred to in subsection (b)(2) shall not include making a

23 contract, or engaging in a combination or conspiracy, to

24 determine a trend factor.

25 ‘‘(e) For purposes of this section—
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1 ‘‘(1) the term ‘historical loss data’ means infor2 mation respecting claims paid, or reserves held for

3 claims reported, by any person engaged in the busi4 ness of insurance;

5 ‘‘(2) the term ‘loss development factor’ means

6 an adjustment to be made to reserves held for losses

7 incurred for claims reported by any person engaged

8 in the business of insurance, for the purpose of

9 bringing such reserves to an ultimate paid basis;

10 ‘‘(3) the term ‘transition period’ means—

11 ‘‘(A) the 4-year period beginning on the ef12 fective date of the Insurance Competitive Pric13 ing Act of 1993, in the case of a person—

14 ‘‘(i) that wrote insurance having an

15 aggregate amount of annual premiums less

16 than $20,000,000; and

17 ‘‘(ii) not more than 50 percent of

18 which was owned or controlled by another

19 person engaged in the business of insur20 ance;

21 in the then most recently ended 1-year period;

22 or

23 ‘‘(B) the 2-year period beginning on such

24 effective date, in the case of any person to

25 which subparagraph (A) does not apply; and
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1 ‘‘(4) the term ‘trend factor’ means an adjust2 ment to be made to losses incurred for claims re3 ported by any person engaged in the business of in4 surance, to reflect a change in inflation or any other

5 change in the estimated loss costs incurred by per6 sons engaged in the business of insurance.’’.

7 SEC. 3. EFFECTIVE DATE.

8 This Act shall take effect 1 year after the date of

9 the enactment of this Act.

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