Which act allows states to regulate insurance without federal intervention?

• A. McCarran-Ferguson Act
• B. Dodd-Frank Act
• C. Insurance Market Reform Act
• D. Fair Competition Act

Answer: (A)

The McCarran-Ferguson Act is the legislation that allows states to regulate the insurance industry without federal intervention. Enacted in 1945, the act essentially endorses the principle of state regulation of insurance, affirming that the business of insurance is primarily regulated by the states. This act recognizes that the states have authority over insurance rates and practices, which has been a key aspect of the insurance regulatory framework in the United States.

The rationale behind the McCarran-Ferguson Act was to ensure that states could address local market conditions and consumer needs effectively. By allowing states to maintain control over insurance regulation, the act promotes competition among insurers and helps protect policyholders from unfair practices.

In contrast, the other options like the Dodd-Frank Act focus primarily on financial reforms in the wake of the 2008 financial crisis and do not pertain specifically to the regulation of insurance at the state level. Similarly, the Insurance Market Reform Act and the Fair Competition Act do not carry the significant regulatory authority that the McCarran-Ferguson Act does concerning insurance. Therefore, the McCarran-Ferguson Act stands out as the correct answer regarding state regulation of insurance and federal non-intervention.