The Antitrust Implications of Collaborative Standard Setting by Insurers Regarding the Use of Genetic Information in Life Insurance Underwriting

Whenever two or more market participants collaborate to restrain trade, the potential applicability of federal and state antitrust laws must be considered. When the collaborating parties are insurance companies, a further layer of analysis may be necessary to determine whether the activity is exempt from federal antitrust regulation. Even if the activity enjoys an exemption, state antitrust law may have different things to say about the activity. Embedded in each of these levels of analysis are many difficult and complex subsidiary questions. In short, the law of insurance antitrust is not a subject for the faint of heart. Antitrust law often has implications in situations where its relevance is least expected. For example, with respect to whether insurers should surrender their option to use genetic information in life insurance underwriting, a seemingly reasonable, innocuous suggestion might be made: Life insurers should voluntarily agree to place a moratorium on the use of genetic information in underwriting. Presently, no insurer makes use of such information, so now is the time to forge such an agreement, before some insurers begin to use the information and then become unwilling to forego the practice. But such a moratorium is essentially an agreement among competing insurers to fix one determinant of the product\u27s price, and this restraint of trade calls into question the possible applicability of federal and state antitrust law (as well as the relevance of possible exemptions under federal or state law, or both). This Article discusses the antitrust issues that would accompany the articulation and implementation of such restrictions