For over a century, there has been a continuing controversy concerning state versus federal regulation of insurance. Since the passage of the McCarran-Ferguson Act, the primary responsibility for regulation has been with the states. However, the decision in American General Insurance Co. v. FTC once again raises the issue of federal regulation of certain areas of the insurance trade. In American General, the court held that the language of the McCarran Act limiting the application of the Clayton Act to those situations where the business of insurance is not regulated by state law did not deprive the Federal Trade Commission (FTC) of jurisdiction to challenge a merger between two insurance companies. There were two grounds for this holding. First, the court concluded that state regulation would be impossible because of the extraterritorial impact of such a merger. Further, the court noted that under the McCarran Act, states are exempted from federal statutes only if they regulate the "business of insurance." The court concluded that since merger activity was not part of the "business of insurance," it was not subject to state regulation. This casenote is limited to a discussion of the court's holding that the McCarran Act did not deprive the FTC of jurisdiction to challenge insurance company mergers as violations of the Clayton Act.
Richard C. Reier,
Debate on State versus Federal Regulation of Insurance Continues: American General Insurance Co. v. FTC, 359 F. Supp. 887 (S.D. Tex. 1973),
53 Neb. L. Rev. 289
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