[Congressional Record Volume 153, Number 29 (Thursday, February 15, 2007)]
[Senate]
[Pages S2044-S2047]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself, Mr. Specter, Mr. Lott, Mr. Reid, and 
        Ms. Landrieu):
  S. 618. A bill to further competition in the insurance industry; to 
the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, so people understand. I know the Senator 
from Pennsylvania has spoken briefly about this and had remarks on it 
printed in the Record.
  Our Nation's competition laws are powerful tools to ensure that 
consumer welfare is the benchmark of fair and accountable industry 
practices. These competition laws are what make businesses work in 
America. The vast majority of the companies doing business in the 
United States are subject to our antitrust laws. Consumers benefit from 
lower prices, more choices, better services.
  There are only a few industries that operate outside the Federal 
antitrust laws. The bipartisan measure I have introduced would end the 
insurance industry's exemption from the requirement of those laws. I am 
joined in this effort, as I said before, by the ranking member of the 
Senate Judiciary Committee. Senator Specter has a strong record of 
supporting effective competition in every industry through our 
antitrust laws. Of course, as I have also said, I am joined by the 
majority leader and by Senator Lott, who is the deputy Republican 
leader.
  Senator Lott probably wishes he was not in this position, but he 
represents many of the gulf coast residents who can speak personally 
and painfully to the abuses that insurers can wreak on their 
policyholders. The insurance industry's practices affect us all. 
Perhaps nowhere has the industry and its practices come under as much 
scrutiny as along the gulf coast in the wake of hurricanes Katrina and 
Rita. Insurers have been too often denying claims and delaying payments 
to residents along the gulf coast instead of honoring their contractual 
commitments. The behavior of insurers in Mississippi has been so 
outrageous that the State's attorney general recently convened a grand 
jury to investigate some of the practices.
  It seems to me, insurance companies are very eager to collect 
premiums when times are good but reluctant to compensate policyholders 
when tragedy strikes. Senator Lott knows all too well the difficulties 
his constituents have had with insurers. His State was hit hard by 
Hurricane Katrina. I commend the Senator from Mississippi for his 
tireless efforts in trying to ensure resources are in place to rebuild. 
I know he is joined in that effort by his colleague from Mississippi, 
Senator Cochran.
  I have worked with others to support efforts to rebuild the Gulf 
Coast. Most recently, I was pleased to assist Senator Landrieu in her 
successful efforts to convince the Attorney General to dispatch 
additional law enforcement to the New Orleans region. People in the 
gulf coast are Americans. They are our fellow citizens. They have been 
utterly failed by a woefully unprepared Government, and they should not 
also be bullied and neglected by insurance companies in their time of 
need.

  The insurance industry has operated largely beyond the reach of 
Federal

[[Page S2045]]

antitrust laws for more than six decades. Assuming there ever was a 
justification to exempt insurers from Federal Government oversight, I 
find it hard to believe there is still a reason to exempt them--not in 
the age of instant communication, the age of the Internet, or the 
ability to compare not only risks but payments. In fact, we need real 
oversight, which can be brought about by removing them from the 
antitrust exemption. We deserve confidence that the industry is not 
engaging in the most egregious forms of anticompetitive conduct, such 
as price-fixing, agreements not to pay, or market allocation.
  Antitrust laws are the beacon of good competition policy. Insurers 
may object to being subject to the same antitrust laws as everyone 
else, but why shouldn't they be subject to the same laws as every other 
company in this country? If they are operating in an honest and 
appropriate and open way, they have nothing to fear.
  I have more on this, but I ask unanimous consent that my full 
statement be placed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

       Mr. LEAHY. Mr. President, to reiterate, our Nation's 
     competition laws are powerful tools to ensure that consumer 
     welfare is the benchmark for fair and accountable industry 
     practices. The vast majority of the companies doing business 
     in the United States are subject to the strictures of the 
     antitrust laws, and consumers benefit through lower prices, 
     more choices, and better services. Only a few industries 
     operate outside the federal antitrust laws, and I am pleased 
     to introduce today a bipartisan measure that will end the 
     insurance industry's exemption from the requirements of those 
     laws.
       I am joined in this effort by the ranking member of the 
     Senate Judiciary Committee who has a strong record of 
     supporting effective competition in every industry through 
     our antitrust laws. I am joined as well by Senator Reid and 
     Senator Lott. Senator Lott represents many of the gulf coast 
     residents who can speak personally, and painfully, to the 
     abuses that insurers can wreak on their policy holders.
       Insurance industry practices affect all of us. They affect 
     each of our constituents; they affect every business in every 
     state. But perhaps nowhere has the industry and its practices 
     come under as much scrutiny as along the gulf coast in the 
     wake of Hurricanes Katrina and Rita. Insurers have been too 
     often denying claims and delaying payouts to residents along 
     the gulf coast instead of honoring their contractual 
     commitments to their customers, and thereby contributing to 
     the rebuilding and rejuvenation of the area.
       The behavior of insurers in Mississippi has been so 
     outrageous that the state's attorney general recently 
     convened a grand jury to investigate certain practices. 
     Hundreds of policyholders had to go to court to force the 
     insurance companies to fulfill their obligations.
       It seems some insurance companies are eager to collect 
     premiums when times are good, but reluctant to aid 
     policyholders when tragedy strikes.
       Senator Lott knows all too well the difficulties his 
     constituents have had with insurers. His state was hit hard 
     by Hurricane Katrina, and I commend him on his tireless 
     efforts to ensure that resources are in place to rebuild. I 
     have worked with them in other contexts to support efforts to 
     rebuild the gulf coast. Most recently, I was honored to have 
     assisted Senator Landrieu in her successful efforts to 
     convince the attorney general to dispatch additional law 
     enforcement to the New Orleans region.
       Our fellow citizens on the gulf coast who have had to cope 
     with the devastation and destruction of the 2005 hurricanes, 
     and who were utterly failed by their woefully unprepared 
     government, should not also be bullied or neglected by 
     insurance companies in their time of need--insurance 
     companies whose business is based on compensating people 
     after a tragic loss.
       Unfortunately, the insurance industry has operated largely 
     beyond the reach of federal antitrust laws for more than six 
     decades. If there ever was, there is no longer any 
     justification to exempt the insurance industry from federal 
     government oversight.
       Such oversight could provide confidence that the industry 
     is not engaging in the most egregious forms of 
     anticompetitive conduct--price fixing, agreements not to pay, 
     and market allocations.
       The Insurance Industry Competition Act we introduce today 
     will simply give the Department of Justice and the Federal 
     Trade Commission the authority to apply the antitrust laws to 
     anticompetitive behavior by insurance companies. Our 
     antitrust laws are the beacon of good competition policy. 
     Competition is good for consumers and good for our economy.
       Insurers may object to being subject to the same antitrust 
     laws as everyone else, but if they are operating in an honest 
     and appropriate way, they should have nothing to fear. 
     American consumers and American businesses rely on 
     insurance--it is a vital part of our economy--and they have 
     the right to be confident that the cost of their insurance, 
     and the decisions by their insurance carriers about which 
     claims will be paid, reflect competitive market conditions, 
     not collusive behavior.
       I thank Senator Reid and Senator Specter for joining me in 
     this important effort. And I thank Senator Lott for his 
     support, and for using the lessons of his constituents' 
     experiences to shed light on an industry that for too long, 
     in too many ways, has been out of the reach of federal 
     antitrust authorities.

  Mr. LEAHY. Mr. President, I see the Senator from Mississippi on the 
floor and the Senator from Pennsylvania. If they are seeking time, I 
would ask how much time they need.
  Mr. LOTT. Mr. President, I wish to withhold until the Senator from 
Pennsylvania makes his brief remarks.
  Mr. LEAHY. How much time does the Senator from Pennsylvania want? 
Because this is coming out of time I had set aside for something else.
  Mr. SPECTER. Less than 5 minutes.
  Mr. LEAHY. I yield 5 minutes to the Senator from Pennsylvania.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. Mr. President, I thank my distinguished colleague from 
Vermont.
  As noted earlier, legislation was introduced in the last Congress by 
Senator Leahy and myself and others to deal with the problem of the 
McCarran-Ferguson Act. We held hearings on this matter in the Judiciary 
Committee. On recent matters which have evolved from Hurricane Katrina, 
which will be amplified by the distinguished Senator from Mississippi, 
Mr. Lott, there is a more pressing need to enter into this arena.
  There have been various attempts over the years to limit McCarran-
Ferguson, and they have not succeeded because, as amplified in a more 
detailed statement which I will include for the Record, there were safe 
harbors proposed. They became very complicated. We have provided in 
this legislation that the Commission decide what is to be violative of 
the antitrust laws, a line which has been successful on the health 
industry.
  The economy of the United States functions much better when the 
antitrust laws are available and enforceable. We see a great many 
problems at the present time with what is happening with the sports 
teams. The National Football League enjoys a limited antitrust 
exemption, and they are proposing the Sunday ticket to DIRECTV, which 
has a monopoly. Cable companies can't get the Sunday ticket. They now 
have the Thursday to Saturday ticket. It is only on the NFL channel. I 
had a talk with the commissioner of the NFL recently, who was living in 
New York City, and he couldn't get the Sunday ticket because his 
highrise wouldn't allow him to put a dish on top of the building.
  May I note for the record the distinguished junior Senator from 
Montana is nodding in the affirmative. He lives in an area--now he is 
smiling. He lives in an area where you need a satellite, and his 
constituents do, and some of mine in Pennsylvania do, and in my home 
State of Kansas. Now baseball is coming along with extra innings and 
exclusive to DIRECTV.
  The impact of the antitrust exemption on the insurance industry has 
been even more profound. But it is noted when we have the Federal Trade 
Commission authorized to issue guidelines in identifying joint 
practices where the antitrust concerns ought to be addressed, that is 
the way to approach it, as the Federal Trade Commission did in the 
health care industry.
  I think this is a significant step forward, and I am glad to see that 
the majority leader, Senator Reid, is behind this legislation. We can 
pass it out of committee, we can take it up on the Senate floor, and I 
think we can provide better protection for the American consumers.
  Mr. President, I ask unanimous consent that the full text of my 
statement be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          Insurance Industry Antitrust Enforcement Act of 2007

       Mr. SPECTER. Mr. President, the Insurance Industry 
     Antitrust Enforcement Act of 2007 would subject the insurance 
     industry to the antitrust laws which apply to almost every 
     other industry in America. Congress enacted the McCarran-
     Ferguson Act in 1945

[[Page S2046]]

     in response to a controversial Supreme Court case in which 
     the Court held that the business of insurance constituted 
     interstate commerce. That ruling opened the door to federal 
     regulation of insurance, a business that had historically 
     been regulated and taxed by the states. McCarran-Ferguson 
     reaffirmed the power of the states to regulate and tax 
     insurance.
       In doing so, Congress exempted the insurance industry 
     practices from antitrust scrutiny to the extent that such 
     practices are ``regulated by state law.'' Since then, the 
     courts have liberally interpreted the phrase ``regulated by 
     state law.'' They have held that insurance industry practices 
     are exempt from the antitrust laws so long as regulators have 
     been given jurisdiction over the challenged practices--
     regardless of whether the regulators ever exercise that 
     jurisdiction.
       Over the years, state regulators have either chosen not to 
     regulate, or failed to regulate, practices that would have 
     violated the antitrust laws absent McCarran-Ferguson. With 
     McCarran-Ferguson, such practices escape both regulatory and 
     federal antitrust oversight. The most notorious practices to 
     come to light involved bid-rigging and customer allocation by 
     insurance broker Marsh & McClennan and several of the 
     nation's largest insurers. Under the scheme, Marsh steered 
     unsuspecting clients to insurers with which it had lucrative 
     payoff agreements. To make the scheme work, Marsh solicited 
     fictitious bids from other complicit insurers to make the bid 
     submitted by the selected insurer--the one that offered Marsh 
     the highest payoff--seem competitive.
       Even though the scheme eliminated competition among the 
     insurance companies that were involved, those companies could 
     not be prosecuted under federal antitrust law. Several states 
     prosecuted the insurance companies under a variety of state 
     laws, including antitrust laws, but federal prosecutors could 
     not bring their significant resources to bear. There simply 
     is no justification for that. Federal law enforcement should 
     have the power to prosecute such blatant violations of the 
     antitrust laws.
       This is not the first attempt to subject the insurance 
     industry to federal antitrust law. In the wake of numerous 
     insolvencies, mismanagement and other misconduct by insurers 
     in the late 1980s, legislation was introduced repealing the 
     exemption. That legislation, introduced by Congressman 
     Brooks, faced opposition from insurers who claimed that many 
     industry practices engaged in jointly by insurance companies 
     were pro-competitive and necessary for smaller insurers. The 
     legislation provided a safe harbor, specifically listing the 
     practices of insurance companies that would be exempt from 
     the antitrust laws. However, it proved impossible to craft a 
     list of safe harbors for all the information that competing 
     insurers claimed they needed to share with one another. This 
     bill has avoided that problem.
       More recently, some have argued that the answer to 
     insurance industry ills is full federal regulation. I do not 
     necessarily believe that stripping the states of their 
     authority to regulate the insurance industry is the answer. 
     This bill does not do that. It allows states to continue to 
     regulate their insurance industries. However, the existence 
     of state regulation is no reason to prevent federal 
     prosecutors from going after antitrust violators. And, there 
     is no reason to prevent federal prosecutors from going after 
     antitrust violators just because those violators happen to 
     work for insurance companies.
       As I have said, allowing federal prosecutors to go after 
     those who violate the antitrust laws will not prevent states 
     from regulating the insurance industry. If a state is 
     actively supervising practices by its insurance industry that 
     might otherwise violate the antitrust laws, this legislation 
     would exempt that practice from the antitrust laws. Antitrust 
     law does not generally apply where a state is actively 
     regulating an industry. This is as it should be and the 
     legislation I introduce today, the Insurance Industry 
     Antitrust Act of 2007, incorporates that standard.
       The Judiciary Committee held a hearing on this issue in 
     May. During the hearing, Marc Racicot, the President of the 
     American Insurance Association, a trade association composed 
     of the nation's largest insurers, acknowledged that ``every 
     state provides some form of antitrust regulation of 
     insurers.'' In other words, many states already enforce their 
     state antitrust laws with respect to insurers. So, I have to 
     ask, why have we tied the hands of federal antitrust 
     enforcers?
       The insurers will argue that repealing the antitrust 
     exemption for insurers will create uncertainty by throwing 
     into question the legality of every joint practice engaged 
     in by insurers. They will argue that the legality of each 
     joint practice will have to be litigated in court. 
     However, this bill has been drafted to avoid such 
     litigation. Rather than incorporating a laundry list of 
     safe harbors, an approach that was taken in the past, the 
     bill would allow the Federal Trade Commission to issue 
     guidelines identifying joint practices that do not raise 
     antitrust concerns and would therefore not face scrutiny 
     from antitrust enforcers.
       This is a job for which the Commission is well equipped. In 
     the past, the Commission along with the Justice Department 
     issued ``Statements of Antitrust Enforcement Policy in Health 
     Care.'' The Health Care Statements identified joint conduct 
     by health care providers that did not raise antitrust 
     concerns and therefore would likely escape scrutiny by 
     antitrust enforcers. The Health Care Statements were designed 
     to give health care providers certainty about the legality of 
     their joint conduct under the antitrust laws. Similar 
     guidelines for the insurance industry would provide insurers 
     with certainty, but at the same time, would ensure that joint 
     practices that are anticompetitive receive scrutiny from the 
     antitrust enforcement agencies.
       Although many insurers oppose repeal of their antitrust 
     exemption, others support a repeal. In particular, the 
     Antitrust Section of the American Bar Association has long 
     supported repeal. During the Judiciary Committee's hearing, 
     the current head of the Antitrust Section, Donald Klawiter 
     noted the Section's nearly 20-year history of supporting 
     repeal. Klawiter testified that ``the benefits of antitrust 
     exemptions almost never outweigh the potential harm imposed 
     on society by the loss of competition.'' At the same hearing, 
     Robert Hunter, testifying on behalf of the Consumer 
     Federation of America, concluded that ``application of the 
     antitrust laws to the insurance industry could result in 
     double-digit savings for America's insurance consumers.''
       It is my hope that this legislation will bring the benefits 
     of competition to the insurance industry and to consumers. 
     Too many consumers are paying too much for insurance due to 
     the collusive atmosphere that exists in the insurance 
     industry. This has become a particular problem along the Gulf 
     Coast, where insurers have shared hurricane loss projections, 
     which may result in double-digit premium increases for Gulf 
     Coast homeowners.
       I strongly urge Members who are concerned about industry 
     exemption from the antitrust laws and collusive insurance 
     industry practices to support this important piece of 
     legislation.

  Mr. LOTT. Mr. President, may I get some time under the agreement?
  Mr. LEAHY. How much time would the distinguished Senator need?
  Mr. LOTT. Probably 5 or 6 minutes. How much would you have left then? 
I don't want to eat up all your time.
  Mr. LEAHY. Again, we are using time that I--Mr. President, I ask 
unanimous consent that my time be extended by 6 minutes, and that I be 
allowed to yield that 6 minutes to the Senator from Mississippi.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Mr. President, let me say at the beginning, I appreciate 
the courtesy of the Senator from Vermont and his comments on our effort 
here; also, my colleague from Pennsylvania, Senator Specter, whom I 
have discussed this issue with several times over the past year.
  Let me begin at the beginning of this effort. I thank my colleagues 
for this bipartisan effort. It shows what we can do when we work 
together. Now, we have a long road to go, but this is being introduced 
as a bipartisan measure with leaders from both sides and leaders of the 
Judiciary Committee joining in cosponsoring this legislation.
  How did I get interested in this area? Well, it is like so many 
things in my life that go back only until August 29, 2005, when 
Hurricane Katrina devastated my hometown and the area of my State that 
I love so much, Mississippi and the gulf coast area. I had been active 
in years gone by actually in the insurance area. I had done some law 
practice in that area. I had done some defense work. But I never had 
become steeped in the laws that apply to the industry because most of 
the time I was dealing with an automobile accident case or something of 
that nature.
  Well, after Hurricane Katrina we learned a lot of lessons, and we 
found a lot of new concerns in areas where we had to take action. One 
of the commitments I have made to the people--and to the Senate because 
the Senate has been so good in helping us in our recovery effort, in 
changing the laws where applicable, the Stafford Act, in providing 
funds. But one of the commitments I made as a result of that is to make 
sure we take a look at what happened to us. What did we learn from 
Katrina? What can we do to have more laws and the right things in place 
after the next natural disaster--and there will be one--or any kind of 
catastrophic disaster? We learned that the laws were not what they 
should be. They needed to be changed. We have changed them some and we 
need to change them some more. We learned the Federal agencies weren't 
necessarily set up properly to do what needed to be done in the 
aftermath of a disaster. We had questions about homeland security and 
the Federal Emergency Management Administration and how the military, 
the Coast Guard, and everybody interplayed together. So we have been 
trying to make those corrections.
  We need to ask ourselves: Do we need to give some additional thought 
to how

[[Page S2047]]

we deal on a national level with the coverage of people or how we help 
them recover? Do we need a national catastrophic insurance program? I 
don't know that I am satisfied I know the answer yet, but I think we 
need to ask that question in advance.
  I also found, to my absolute horror, something I should have known, 
which is that the insurance industry is not covered by antitrust laws. 
They have a waiver. I said: How could that be? I remember hearing 
discussion over the years about the McCarran-Ferguson Act, but I never 
focused on it. When I realized that ratesetting and actually policy 
actions by the industry were not covered by antitrust laws, I was 
stunned. I understand you need a lot of information to decide on rates, 
but that information can be used back and forth to in effect set rates 
as an industry without making sure that it is not done in an 
anticompetitive way. Do you mean that under this exemption, that 
companies could collude on what actions they take or, even worse, what 
actions they don't take, which is what we got into after Hurricane 
Katrina? We had companies basically saying: Oh, no, no, you are covered 
by Federal flood insurance. We don't have to pay under the household 
policies for wind damage.
  So as I got into it, I found that this happened back in 1944. At that 
point, there was regulation of the insurance industry, but there was a 
case styled the United States v. South Eastern Underwriters Association 
which caused a change in how insurers were regulated. Then the Congress 
immediately acted and said: Oh, no, we are going to say that federal 
antitrust laws do not apply to this industry.
  Soon the courts got into this issue and took a look at what happened. 
They looked at the record. There were no hearings in the Senate. It was 
passed quickly on a voice vote, and it went quickly through the House. 
The conference report was debated for 2 days by the Senate, and most of 
the debate, as I have looked at it, looks as though everybody thought 
this was going to be a temporary moratorium. However, that is not the 
way the courts have interpreted the laws.
  Under the McCarran-Ferguson Act, insurers are exempt from antitrust 
scrutiny, so long as they are regulated by State law. Then you get into 
a patchwork of State laws: Do the States actively regulate them? Is 
there a process for antitrust activities to be considered?
  Over the years, many have advocated the repeal of this antitrust 
exemption. The Judiciary Committee had hearings on this last summer. 
The American Bar Association's antitrust section noted that the 
organization for nearly 20 years has supported repeal of this 
exemption. Look, there is a unique role for States to deal with 
insurance questions and needs in those States, but my question beyond 
that is: Should the Federal Government have the right to make sure 
there are not anticompetitive activities, to make sure there is no 
colluding? I think we need to take a serious look at that. This 
legislation would do that. It would take away that exemption. It would 
make the insurance industry subject to the same coverage of almost 
every other corporation in America: antitrust legislation.
  I know my time has expired. I thank the Chair for his leniency. I 
thank Senator Leahy for doing this. I look forward to having the 
hearings and testifying. This is wrong, Mr. President, and the Senate 
in a bipartisan way should, and I believe will, correct it.
  I yield the floor.
  Mr. LEAHY. Mr. President, I thank my friend from Mississippi, and I 
am proud to be joining with him on this. He and I have discussed this 
several times over the past several months. I told him last fall I 
would join with him on such legislation, and I am proud to do so.
  Mr. REID. Mr. President, I want to express my support for the 
``Insurance Industry Competition Act of 2007,'' which repeals the well-
known McCarran-Ferguson Act. McCarran-Ferguson gave States the 
authority to regulate the business of insurance and exempted insurance 
from the Federal antitrust laws. Unfortunately, McCarran-Ferguson came 
about as a result of a Senator from my State of Nevada, McCarran, and a 
Senator from Michigan, Ferguson. It was passed to give a few years of 
relief to the insurance industry. In 1944, the United States Supreme 
Court ruled against the industry-wide practice of cooperating to set 
premium prices in United States v. Southeastern Underwriters 
Association. Insurers argued that most companies were too small to rely 
solely on their own experience in setting premiums. As a result of 
these protests the McCarran-Ferguson Act was passed by Congress in 
1945, exempting insurance-rate fixing from the Sherman Antitrust Act, 
and placing responsibility for industry regulation in the hands of 
state governments.
  Now, some 60 plus years later, insurance companies are the only 
businesses--other than Major League Baseball--not subject to antitrust 
laws. Congress began investigating the effectiveness of State insurance 
regulation in 1958, under the oversight of Senator O'Mahoney, who had 
been a principal architect of the McCarran-Ferguson Act, and found 
State regulation lacking, incapable of dealing with interstate and 
international issues, and unwilling or unable to ``bring the blessings 
of competition'' to insurance rate-making. The same thing is true 
today, and its time we take action to remedy this situation. The 
rationale for this exemption has long since passed. Insurance should be 
like any other business--subject to antitrust laws.
  Senator Leahy's bill would accomplish this. ``The Insurance Industry 
Competition Act of 2007'' would repeal the exemption and simply give 
the Department of Justice and the Federal Trade Commission the 
authority to apply the antitrust laws to anticompetitive behavior by 
insurance companies. Such oversight could ensure that the industry is 
not engaging in the most egregious forms of anticompetitive conduct--
price fixing, agreements not to pay, and market allocations. This Act 
would not affect the ability of each State to regulate the business of 
insurance.
  If insurers around the country are operating in an honest and 
appropriate way, they should not object to being answerable under the 
same Federal antitrust laws as virtually all other businesses. American 
consumers should be confident that the cost of their insurance reflects 
competitive market conditions, not collusive behavior, and they should 
benefit through lower prices, more choices, and better services.
  Perhaps nowhere has the insurance industry and its practices come 
under as much scrutiny as along the Gulf Coast in the wake of 
Hurricanes Katrina and Rita. Just yesterday, the AP reported that 
``State Farm Insurance Cos. is suspending sales of any new commercial 
or homeowner policies in Mississippi starting Friday.'' I ask Unanimous 
Consent that a news article dated February 14, 2007, from the 
Associated Press be printed in the Record. Insurers have been too often 
denying claims and delaying payouts to residents of New Orleans and all 
along the Gulf Coast instead of honoring their contractual commitments 
to their customers, and thereby contributing to the rebuilding and 
rejuvenation of the area. We need to act now to end this practice. I 
thank Senators Leahy, Specter, and Lott for their work on this 
important legislation.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                  State Farm: No New Policies in Miss.

                         (By Michael Kunzelman)

       State Farm Insurance Cos. is suspending sales of any new 
     commercial or homeowner policies in Mississippi starting 
     Friday, citing in part a wave of litigation it has faced 
     after Hurricane Katrina, a company official said Wednesday.
       Mike Fernandez, vice president of public affairs for State 
     Farm, said Mississippi's ``current legal and political 
     environment is simply untenable. We're just not in a position 
     to accept any additional risk in this homeowners' market.''
       Fernandez said the action was not a direct response to any 
     specific development in the litigation. That litigation has 
     included a recent federal jury's $2.5 million punitive damage 
     award to a policyholder who sued State Farm for refusing to 
     cover the 2005 hurricane's storm surge damage.
       State Farm, the largest homeowners insurer in Mississippi 
     with more than 30 percent of the market, agreed to settle 
     hundreds of lawsuits by policyholders and reopen and pay 
     thousands of other disputed claims. The landmark deal is 
     potentially worth hundreds of millions of dollars for 
     Mississippi homeowners devastated by Katrina.
                                 ______