Brian McCarthy


The McCarran-Ferguson Act provides that the business of insurance shall be subject to the laws of the several states which relate to the regulation or taxation of such business. The Act further provides that the business of insurance shall be exempt from federal antitrust laws if state regulation exists. However, an exception to this exemption exists in section 3(b) of the McCarran Act. Section 3(b) provides that nothing within the McCarran Act shall render the Sherman Act inapplicable to any agreement to boycott, coerce, or intimidate, or any act of boycott, coercion, or intimidation. Despite the seemingly clear statutory language of section 3(b), the trend of judicial construction of this statute until recently had been to narrow substantially this exception to the federal antitrust exemption. Note examines the legislative history of section 3(b) of the McCarran-Ferguson Act, the authorities which provided the traditional narrow interpretation of the boycott exception, and the effects of the Barry and Proctor decisions on insurance companies and consumers.