Federal Courts and the Regulation of the Insurance Industry: An Empirical and Historical Analysis of Court's Ineffectual Attempts to Harmonize Federal Antitrust, Arbitration and Insolvency Statutes with the McCarran-Ferguson Act - 1941-1993

Date

1994

Authors

Rice, Willy E.

Journal Title

Journal ISSN

Volume Title

Publisher

Catholic University Law Review

Abstract

This Article presents both historical and empirical evidence to support the view that the Supreme Court and the lower federal courts are inferior forums for resolving insurance-related controversies. It is amply apparent that "inferior" is an appropriate description of federal courts that have tried to harmonize federal antitrust, insolvency, and "superpriority" statutes with key sections of the McCarran-Ferguson Act.

Part I presents a brief overview of the McCarran-Ferguson Act and the Act's allocation of power among state governments, federal agencies, and courts. In particular, Part I examines the origin and breadth of the courts' power to regulate the insurance industry. Parts II, III, and IV offer several discussions of inter-circuit conflicts involving key provisions of the McCarran-Ferguson Act. Specifically, Part II discusses the inter-circuit conflict over the definition of "business of insurance." Does the definition encompass both "for-profit" and "nonprofit" insurers? Or are the nation's Blue Cross and Blue Shield companies engaged in the "business of insurance"? Unquestionably, a serious conflict exists among federal courts of appeals over these and similar questions. Moreover, this disagreement is producing significant problems for both consumers and the insurance industry.

This Article concludes that the movement to reform the McCarran Ferguson Act is misplaced. Instead, Congress should prevent federal courts from deciding any legal issue or question concerning the business of insurance or the massive insurance industry.

Description

Keywords

Insurance, McCarran-Ferguson Act, Regulation

Citation

43 Cath. U. L. Rev. 399