Definitions for "McCARRAN-FERGUSON ACT"
Passed by Congress in 1945, this act states that regulation and taxation of insurance by the states is in the public interest, and that congressional silence should not be construed as a barrier to state regulation.
Federal legislation (U.S. Code Title 15, Chapter 20) enacted in 1945 to permit the states to continue regulating the insurance business after the Supreme Court, in U.S. v. South-Eastern Underwriters Association, overruled the decision in Paul v. Virginia, declaring insurance to be interstate commerce and therefore within Congress's constitutional authority to regulate. Under the Act, insurance is exempt from some federal antitrust statutes to the extent that it is regulated by the states. The exemption primarily applies to gathering data in concert for the purpose of ratemaking. Otherwise, antitrust laws prohibit insurers from boycotting, acting coercively, restraining trade, or violating the Sherman or Clayton Acts.
Federal legislation enacted in 1945, in which Congress agreed to defer to state regulatory authorities in the regulation of the insurance industry. The legislation specifically provides for a limited federal antitrust exemption.