Policy Documents

Modernizing Insurance Regulation

The Heartland Institute –
May 31, 2007

The McCarran-Ferguson Act of 1945 ushered in the current era of state regulation of the insurance industry. This national legislation granted states the authority to regulate property and casualty insurance by codifying a Supreme Court ruling in which insurance was found not to be an interstate commercial product. And regulate they do.

Over time the insurance and financial industries have evolved, markets have become more integrated, and the two industries have even converged in the sense of offering similar products but under different regulatory regimes. The old rationale for state regulation may be getting weaker, and calls for deregulation by the states or federal preemption are becoming louder.

A new Research & Commentary package from The Heartland Institute outlines the facts in this debate. Inside you will learn about two proposals: a multistate compact on insurance regulation, and a proposal to offer insurers the choice to be regulated by states or the national government (the “optional federal charter”).