Also known as: regulate by state law · regulation by state law · state-regulated · state regulation
Written by attorneys · grounded in primary & secondary sources — see below
A statutory condition under the McCarran-Ferguson Act requiring that the business of insurance be subject to state oversight for the federal antitrust exemption to apply. The state satisfies the condition by enacting a statute addressing the activity, without any need for active enforcement or comprehensive supervision.
Riverfront Developments, an out-of-state insurer, faces a discriminatory premium tax enacted by State X on policies sold to residents. Congress has passed legislation expressly authorizing states to impose such taxes on insurance to protect local markets. State X has enacted the required statute, satisfying the regulated-by-state-law condition and triggering the McCarran-Ferguson antitrust exemption.
Riverside Healthcare, a privately operated nursing home receiving substantial Medicaid funding, adopts a policy of transferring certain patients. Extensive state statutes govern licensing, funding, and patient rights at such facilities. Those statutes illustrate the lower threshold referenced in the definition even though the transfer decisions themselves do not qualify as state action.
Select any source to read its text and confirm it supports the definition.
Enactment of a statute addressing the insurance activity is enough. Active supervision or detailed rules are not required, and the standard is lower than the one for state-action immunity.
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A higher standard would render the McCarran exemption superfluous because the same conduct would already be protected under state-action doctrine. The statute therefore requires only the existence of a state law on the subject.
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No. The condition is satisfied by passage of the statute itself. Enforcement or active regulation is not necessary under the McCarran-Ferguson framework.
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