H-1115              _______________________________________________

                                           HOUSE JOINT MEMORIAL NO. 4014

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Representatives Lux, Armstrong, Nelson, Fisch, Bristow, McMullen, Meyers, Crane, Leonard and Belcher

Read first time 2/11/87 and referred to Committee on Financial Institutions & Insurance.

TO THE HONORABLE RONALD REAGAN, PRESIDENT OF THE UNITED STATES, AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED:

          We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:

          WHEREAS, The business of insurance is conducted on a national basis; and

          WHEREAS, The business of insurance affects national as well as state interests; and

          WHEREAS, The recent national problem of property and casualty insurance availability and affordability demonstrates the need for strong and effective regulation of the insurance industry; and

          WHEREAS, The insurance industry is primarily, if not exclusively, regulated by each of the fifty states; and

          WHEREAS, Insurance companies that conduct business in more than one state must comply not only with different statutes governing similar activities but also with varying degrees of enforcement of insurance statutes from state to state; and

          WHEREAS, The McCarran-Ferguson Act generally exempts the business of insurance from federal laws and specifically exempts the business of insurance from the federal antitrust laws to the extent that the business of insurance is regulated by state law; and

          WHEREAS, The McCarran-Ferguson Act does not define what constitutes state regulation, and judicial interpretation of this requirement of state regulation permits exemption from federal law whether or not a state law governing insurance is effectively enforced or enforced at all; and

          WHEREAS, State deregulation of insurance, including deregulation of rates through statutes requiring competitive rating of insurance, has negated the fundamental purpose for exempting the business of insurance from federal antitrust laws; and

          WHEREAS, No state has the capability to adequately control the practices of national and international insurance companies, particularly the practices of reinsurance companies; and

          WHEREAS, Recent competitive practices by property and casualty insurers in markets for commercial and professional liability insurance have led to disastrous economic and social consequences, both for the insurance industry and the public;

          NOW, THEREFORE, Your Memorialists respectfully request Congress to repeal the McCarran-Ferguson Act, to adopt all necessary statutes to effectively regulate the management and market practices of the insurance industry, and to establish federal reinsurance programs for those businesses and professions unable to obtain or afford liability insurance.

          BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable Ronald Reagan, President of the United States, the President of the United States Senate, the Speaker of the House of Representatives, and each member of Congress from the State of Washington.