Antitrust & Policy
The Loss Executives Association welcomes lively presentations and discussions at all of its meetings and programs. The LEA reminds all of its members, program registrants and presenters of the need for care during all meetings and discussions, so as to avoid any violation of relevant Federal or state antitrust statutes. These statutes, as defined by Black’s Law Dictionary, are intended to protect free trade and commerce from unlawful restraints, price discriminations, price fixing, monopolies or other anti-competitive practices including boycotts or refusals to deal. Federal statutes include: Sherman Act (1890); Clayton Act (1914); Federal Trade Commission Act (1914); and Robinson-Patman Act (1936). Most states have also enacted some form of antitrust legislation, usually patterned upon one or more of the Federal statutes.
The McCarran-Ferguson Act, a Federal statute which permits states to regulate and tax foreign insurance companies which do business within the state, provides a limited exemption or immunity from Federal antitrust statutes, so long as conduct relates to spreading of risks and other practices that are limited to the insurance industry, such as the relationship between the insurer and the insured.
In order to avoid any suggestion of behavior that might violate antitrust provisions that are beyond the scope of the limited exemption provided by the McCarran-Ferguson Act, all participants at LEA meetings are reminded that there should be no discussion whatsoever and no agreements whatsoever concerning the following topics:
- Underwriting rates or underwriting policies
- Pricing of policies, endorsements, or any other service or product offered by insurance companies or their agents
- Coverage positions relating to policies, exclusions, limitations, endorsements or other provisions
- Positive or negative aspects of operating within individual states or jurisdictions
- Favored or disfavored prospective insureds; suppliers; vendors of insurance services; and, any practice that could be construed as a boycott or refusal to deal with individuals or entities that provide service to either policyholders or insurers
- Discussions of underwriting or other issues which could be interpreted as “signaling” to others future pricing decisions.
Despite the limited exemption/immunity provided by the McCarran-Ferguson Act, the insurance industry is to remain competitive and is to include the independent business decisions and judgments of the various insurance companies. At LEA sessions, there can be no agreements, express or implied, and no signaling of such agreements; and, of course, no collusion concerning any of the individual topics listed above.
Despite these restrictions, there is still ample room for lively, informative, creative and productive discussions of contemporary issues and challenges confronting today’s insurance claims decision makers.