What significant change did the McCarran Ferguson Act introduce?

The McCarran-Ferguson Act, enacted in 1945, significantly bolstered state regulation of the insurance industry, affirming that states have the primary authority to regulate insurance companies. The act was a response to the need for regulatory clarity, as it acknowledged that insurance was primarily a state concern and should be governed by state laws rather than federal oversight.

By sustaining the states' ability to regulate insurance, this act facilitated diverse insurance regulations tailored to the specific needs of different regions, which is essential in a field where local markets can greatly differ. The act also included provisions that stated federal antitrust laws would not apply to the business of insurance as long as the state was regulating that business. This unique framework led to a robust state-based system of insurance regulation that still persists today.