Mississippi 4th District U.S. Rep. Gene Taylor and fellow Democratic Rep. Peter DeFazio of Oregon filed a bill Thursday to remove the federal antitrust exemption from the insurance industry.
The legislation follows the controversy involving American International Group Inc., which has received $182 billion in bailout money and paid out about $165 million in bonuses to about 400 employees in its Financial Products unit.
According to a news release from Taylor’s office, the insurance exemption from antitrust laws gave AIG a free pass to become “too big to fail,” leaving taxpayers to bail them out or risk further damage to the U.S. economy.
“Insurance companies believe that they are above the law,” Taylor said in the news release. “When it comes to the federal laws, they are. After Hurricane Katrina, insurance companies took advantage of the lack of federal oversight to bill the National Flood Insurance Program for wind damage. Taxpayers also paid for FEMA trailers, home repair grants, subsidized loans, and tax deductions for property damage that insurance should have covered.”
“AIG was gambling with people’s life savings and lost it all to speculative and shady transactions and contributed to the current crisis. We must insure this never happens again,” DeFazio said.