The Alliance of Automotive Service Providers of New Jersey (AASP/NJ), the state’s largest association of collision and mechanical repairers, has endorsed the United States’ House and Senate proposed “Insurance Industry Competition Act.” The Senate version was introduced by Sen. Patrick Leahy (D-VT), chairman of the U.S. Senate Judiciary Committee, Sen. Arlen Specter (R-PA), Senate Judiciary Ranking Member, Sen. Harry Reid (D-NV), Senate Majority Leader and Sen. Trent Lott (R-MO), Senate Republican Whip. The House version has been co-sponsored by Rep. Rodney Alexander (R-LA), Rep. Bobby Jindal (R-LA), Rep. Charles Melancon (D-LA), Rep. Gene Taylor (D-MO), Rep. Walter Jones (D-NC) and Rep. Peter DeFazio (D-OR).
The Sherman Antitrust Act, enacted by Congress in 1890, was designed to promote free competition and protect consumers by prohibiting monopolies or conspiracies between competitors. The Federal Trade Commission was set up in 1914 to enforce the Sherman Antitrust Act.
In 1945, Congress passed the McCarran-Ferguson Act, allowing the insurance industry an exemption to the Sherman Antitrust Act for activities related to the “Business of Insurance.” The McCarran-Ferguson Act prevents the Federal Trade Commission and/or the Justice Department from investigating the conduct of insurance companies.
Now, in light of insurers recording all-time record profits, combined with multiple class-action lawsuits based upon insurers’ denials of legitimate claims, Congress is reconsidering the McCarran-Ferguson Act exemption to the Sherman Antitrust Act.
“This is an unprecedented course of action for our industry,” AASP/NJ President Tom Elder says. “Obviously, there was a time when the exemption was necessary for the good of the country. But that was over half a century ago. The insurance industry has had 62 years to take advantage of the McCarran-Ferguson Act. It’s time for the insurance industry to compete on a level playing field. These proposed bills will help our industry tremendously. Everyone in the automotive repair industry should get behind them.”