Financial Guaranty Insurance: Is it “the Business of Insurance” Under the McCarran Act?

Friday, January 1st, 1988 at 12:00 am by Richard C. Bosse, Jr.
Richard C. Bosse, Jr., Financial Guaranty Insurance: Is it “the Business of Insurance” Under the McCarran Act?, 1988 Colum. Bus. L. Rev. 855

This Note argues that hybrid insurance instruments that serve primarily investment functions are not solely the “business of insurance” as contemplated by the McCarran-Ferguson Act (the “McCarran Act”) and should not be exempt from federal jurisdiction. Part I describes the purpose of the McCarran Act and sets forth the controversy concerning its application to hybrid instruments. Part II argues that under federal common law and federal regulatory schemes, hybrid insurance instruments such as financial guaranty insurance could be classified as “insurance” or “investment.” Part III proposes a more precise judicial and administrative test that looks to the functional characteristics of the instrument as well as its traditional insurance features for purposes of regulatory classification.

Author Information