Please keep in mind the numerous state and Federal laws absolutely prohibit the exchange of information among competitors regarding price, refusal to deal, or agreements to proceed in certain anti-competitive respects, and that no such exchange of this information is either sanctioned by NCAMIC or will be permitted during our meeting. This is a very serious matter and your cooperation will be appreciated.
We ask you not to refer to any company or agency by specific name in any example you may give as an illustration during our discussions.
There will be no specific discussion concerning price, profits, commission or any other cost components and elements.
Although Congress has given a limited exemption to the insurance industry from certain otherwise prohibited activities, by enactment of the McCarran-Ferguson Act, the membership of NCAMIC should realize that:
- NCAMIC itself, as a trade association, has no such exemptions, and
- the exemption provided companies has defined limits.
Conviction upon violation of the anti-trust laws (Sherman Act, Clayton Act, FTC Act and Robinson-Patman Act) will result in mandatory jail sentences, fines or both, even for first offenders who are otherwise leaders in their communities. This means you.
Insurance company practices (your activities included, both in and out of the meeting room) are exempt only if they:
- involve the business of insurance;
- are regulated by state law; and
- do not constitute an agreement to boycott, coerce, or intimidate or an act to further any of the three.
Beside discussions involving the big three (boycott, coercion and intimidation) which are never protected under any circumstances, here are some points and practices which could get both you and NCAMIC in trouble with the FTC or Justice Department. Please note that legislative activities are protected by the 1st Amendment and are generally not subject to anti-trust laws:
- Discussing rates or the stabilizing of rates or other terms or conditions of any products to be offered for sale.
- Discussing underwriting criteria with an eye toward standardizing.
- Discussing a market division plan without a state law covering the plan, including discussions of type or products to be offered, customers to whom insurance products may be sold or the territories in which they may be sold.
- Discussing matters that would adversely affect availability of insurance or services to the public.
- Discussing future rate plans including actuarial projections.
- Discussing “fair” profit levels.
- Keeping access to NCAMIC membership unduly restrictive or denying unique services of NCAMIC to nonmembers.
- Developing “standards” for company operations.
- Trading information on bidding for office equipment and supplies or agreeing to collectively refrain from purchasing any equipment, services or supplies for any supplier.
- Suggesting a certain credit policy.
If any of the above occurs, you should object, have your objection noted in the minutes and, if discussion continues, leave the room. Further, the prohibitions apply to discussion in an informal or social setting, not just regularly schedule meetings.
If you see any prohibited practices creeping into any NCAMIC meetings or social events, please mention your concerns to others.