Category: Global regulation · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-05
The McCarran-Ferguson Act, Public Law 79-15, codified at 15 USC §§1011-1015, is the United States federal statute enacted on 9 March 1945 that preserves the regulation and taxation of the business of insurance to the several States. It provides that no Act of Congress shall be construed to invalidate, impair or supersede any state law enacted for the purpose of regulating the business of insurance unless the federal Act specifically relates to the business of insurance — a reverse-pre-emption rule unique to the insurance industry.
Category: Global insurance regulation Also known as: Public Law 79-15, 15 USC 1011 Jurisdiction: United States (federal) Founding statute / instrument: McCarran-Ferguson Act 1945, Pub. L. 79-15, 59 Stat. 33 Related concepts: US insurance regulation, NAIC, NY DFS, California Department of Insurance
The Act has three central provisions. §1011 declares as Congressional policy that “the continued regulation and taxation by the several States of the business of insurance is in the public interest”. §1012 provides that “the business of insurance, and every person engaged therein, shall be subject to the laws of the several States” and creates the reverse-pre-emption rule. §1013 provides a limited antitrust immunity: the Sherman Act, Clayton Act and Federal Trade Commission Act apply to the business of insurance only “to the extent that such business is not regulated by State law”, with an absolute carve-out for acts of boycott, coercion or intimidation.
The Act was the legislative response to the Supreme Court’s decision in United States v South-Eastern Underwriters Association, 322 US 533 (1944), which had reversed seven decades of precedent under Paul v Virginia (1869) by holding that insurance was interstate commerce within the reach of federal antitrust law.
McCarran-Ferguson is itself the founding instrument: it is a short federal statute, five sections in length, conferring no substantive supervisory powers but operating as a rule of construction governing the interaction of federal and state law. The “business of insurance” has been the subject of considerable Supreme Court interpretation, most notably in SEC v National Securities, Inc. (1969) and Group Life & Health Insurance Co v Royal Drug Co (1979), which adopted a three-factor test: whether the practice transfers or spreads policyholder risk, whether it is an integral part of the policy relationship, and whether it is limited to entities within the insurance industry.
In practice, McCarran-Ferguson means that most federal regulatory regimes that would otherwise sweep across financial services have been disapplied or accommodated for insurance. The Dodd-Frank Act 2010 expressly preserved state insurance regulation while creating the Federal Insurance Office (FIO) within Treasury for monitoring and international coordination. ERISA pre-emption of state law contains a “savings clause” for state laws regulating insurance, itself shaped by McCarran-Ferguson jurisprudence.
The Act’s antitrust immunity has been narrowed over time and is the subject of periodic legislative challenge — the Competitive Health Insurance Reform Act of 2020 (Pub. L. 116-327) removed the immunity for health insurance, leaving it in place for property, casualty and life.
The McCarran-Ferguson concept has no direct UK equivalent. UK insurance regulation is conducted by the PRA and FCA under the Financial Services and Markets Act 2000 within a unitary national framework. UK insurers are subject to the full competition regime under the Competition Act 1998 and the Enterprise Act 2002 with no insurance-specific antitrust immunity, although certain “block exemptions” derived from EU competition law (the Insurance Block Exemption Regulation) historically applied; that block exemption lapsed in 2017.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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