I 
109TH CONGRESS 
1ST SESSION H. R. 2401
To modify the antitrust exemption applicable to the business of insurance. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 17, 2005
Mr. DEFAZIO (for himself, Mr. BAIRD, Mrs. CHRISTENSEN, Mr. CROWLEY, 
Mr. HINCHEY, and Mr. TAYLOR of Mississippi) introduced the following 
bill; which was referred to the Committee on the Judiciary 
A BILL 
To modify the antitrust exemption applicable to the business 
of insurance.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Insurance Competitive 
Pricing Act of 2005’’. 
SEC. 2. AMENDMENTS. 
Section 2 of the Act of March 9, 1945 (59 Stat. 34; 
15 U.S.C. 1012), commonly known as the McCarran-Fer-
guson Act, is amended—
(1) in subsection (b)—
(A) by striking ‘‘: Provided, That after 
June 30, 1948,’’ and inserting ‘‘, except that’’, 
(B) by inserting ‘‘section 5 of’’ after 
‘‘Clayton Act, and’’, 
(C) by inserting ‘‘as such section 5 relates 
to monopolies, attempts to monopolize, and un-
lawful restraints of trade,’’ after ‘‘Commission 
Act, as amended,’’, and 
(D) by striking ‘‘that such business’’ and 
all that follows through ‘‘law.’’ and inserting 
the following: 
‘‘that—
‘‘(1) such business is not regulated by State 
law; or 
‘‘(2) the conduct of a person engaged in such 
business involves—
‘‘(A) price fixing; 
‘‘(B) allocating with a competitor a geo-
graphical area in which, or persons to whom, 
insurance will be offered for sale; 
‘‘(C) unlawfully tying the sale or purchase 
of—
‘‘(i) one type of insurance to the sale 
or purchase of another type of insurance; 
or
‘‘(ii) any type of insurance to the sale 
or purchase of any other service or prod-
uct; or 
‘‘(D) monopolizing, or attempting to mo-
nopolize, any part of the business of insur-
ance.’’, and 
(2) by adding at the end the following: 
‘‘(c) The conduct referred to in subsection (b)(2) 
shall not include making a contract, or engaging in a com-
bination or conspiracy—
‘‘(1) to collect, compile, or disseminate histor-
ical loss data; 
‘‘(2) to determine a loss development factor ap-
plicable to historical loss data; or 
‘‘(3) to perform actuarial services if such con-
tract, combination, or conspiracy does not involve a 
restraint of trade. 
‘‘(d) The conduct referred to in subsection (b)(2) 
shall not include making a contract, or engaging in a com-
bination or conspiracy, to determine a trend factor—
‘‘(1) during the transition period; and 
‘‘(2) in the case of a person with a policy-
holders’ surplus of less than $10,000,000 or a pol-
icyholders’ surplus of less than $100,000,000 and 
whose direct written insurance premiums for the line
of business in question constitutes less than a 2.5 
percent share of the total market in the most re-
cently ended 1-year period in every jurisdiction in 
which the person is engaged in the business of insur-
ance and which is not more than 50 percent owned 
or controlled by another person engaged in the busi-
ness of insurance and which does not, together with 
other persons engaging in such conduct have, in the 
aggregate, in the then most recently completed 1-
year period, 20 percent or more of the relevant mar-
ket in the line of insurance involved. 
‘‘(e) For purposes of this section—
‘‘(1) the term ‘historical loss data’ means infor-
mation respecting claims paid, or reserves held for 
claims reported, by any person engaged in the busi-
ness of insurance; 
‘‘(2) the term ‘loss development factor’ means 
an adjustment to be made to reserves held for losses 
incurred for claims reported by any person engaged 
in the business of insurance, for the purpose of 
bringing such reserves to an ultimate paid basis; 
‘‘(3) the term ‘transition period’ means—
‘‘(A) the 4-year period beginning on the ef-
fective date of the Insurance Competitive Pric-
ing Act of 2005, in the case of a person—
‘‘(i) that wrote insurance having an 
aggregate amount of annual premiums less 
than $20,000,000; and 
‘‘(ii) not more than 50 percent of 
which was owned or controlled by another 
person engaged in the business of insur-
ance; 
in the then most recently ended 1-year period; 
or 
‘‘(B) the 2-year period beginning on such 
effective date, in the case of any person to 
which subparagraph (A) does not apply; and 
‘‘(4) the term ‘trend factor’ means an adjust-
ment to be made to losses incurred for claims re-
ported by any person engaged in the business of in-
surance, to reflect a change in inflation or any other 
change in the estimated loss costs incurred by per-
sons engaged in the business of insurance.’’. 
SEC. 3. EFFECTIVE DATE. 
This Act shall take effect 1 year after the date of 
the enactment of this Act.
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