Jones’ Bark Dangers Congress’ Chew on McCarran-Ferguson

California’s elected insurance coverage commissioner, Dave Jones, is within the behavior of selecting fights he can’t win. From his perch atop the nation’s largest insurance coverage regulatory physique, he’s sought a federal investigation right into a close to midair collision, waged a rhetorical warfare in opposition to Congress over health-care reform and barked on the president over issues associated to overseas coverage.
But Jones’ near-daily press musings, whereas equal elements amusing and irrelevant, hardly ever current a danger to the shoppers he purports to guard. This week marks an exception.
In an interview discussing an anticipated govt order associated to the sale of insurance coverage merchandise throughout state traces, Jones mentioned:
…(the nationwide system of state-based insurance coverage regulation is) essentially grounded within the notion of states’ rights and states’ choice of the suitable degree of shopper safety. Relying on how he (Trump) points the order, it may very well be straight opposite to federal and state legislation, during which case I might sue him to dam it.
Jones’ risk pertains to his understanding of the McCarran-Ferguson Act. Handed by Congress in 1945, the legislation affirmed that the federal authorities had voluntarily relinquished its authority to manage the enterprise of insurance coverage to the states, offered the states moved to undertake efficient regulatory and antitrust authorities. It additionally set forth a presumption that congressional motion not expressly directed at insurance coverage doesn’t pre-empt state legal guidelines associated to insurance coverage.
Whereas it’s true that the Trump administration’s govt order might properly run afoul of McCarran-Ferguson, Jones’ bluster about states’ “rights” paints a goal on the very system of state-based insurance coverage regulation he helps by characterizing it as an impediment to reform. Lest Jones overlook, Congress is managed by Republicans. Like every grant of authority, energy ceded by Congress will be taken again.
In different phrases, the established order is much from a “proper” and isn’t someway assured. In truth, the system of state-based insurance coverage regulation is positioned at risk by needlessly defiant statements and threats like these Jones is issuing.
Happily, the rhetoric of the trade as a complete, and different insurance coverage commissioners specifically, has been extra informative than incendiary. For example, the Nationwide Affiliation of Insurance coverage Commissioners, which can be involved in regards to the anticipated govt order, has expressed constructive causes for retaining a state-by-state method to insurance coverage gross sales, licensing and oversight.
What counts nearly as good politics in California courts coverage catastrophe for the nationwide trade. Sarcastically, regardless of of all of his greatest efforts, the very best protection for the present state-based system of regulation may very well be Jones’ personal relative obscurity amongst decisionmakers in Washington.

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