DEFINITION of 'United States V. The South-Eastern Underwriter Association'

A United States Supreme Court case involving the federal antitrust statute and the insurance industry. United States v. The South-Eastern Underwriter Association (322 U.S. 533), which was decided on June 5, 1944, determined that the insurance industry is subject to regulation by the United States Congress, under the Commerce Clause.


The case came before the Supreme Court on appeal from a Northern District of Georgia court. The South-Eastern Underwriters Association had control of 90% of fire and other insurance markets in six southern states and was believed to have an unfair monopoly, brought on through price fixing. The case focused on whether or not insurance was a type of interstate commerce that should fall under the United States Commerce Clause and the Sherman Antitrust Act.

BREAKING DOWN 'United States V. The South-Eastern Underwriter Association'

The Supreme Court held that insurance companies that conduct significant portions of their business across state lines, were in fact engaging in interstate commerce. The ruling held that the insurance industry could be regulated by Federal law, rather than only state laws.


The following year, in 1945, Congress passed the McCarran-Ferguson Act (Public Law 15), overruling the Supreme Court decision and prescribing that insurance regulation was a matter for the states and not the Federal government. The McCarran-Ferguson Act exempted the insurance industry from most Federal regulation, including anti-trust laws.

RELATED TERMS
  1. Underwriting Risk

    Underwriting risk is the risk of loss borne by an underwriter ...
  2. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
  3. Early Warning Tests

    A series of financial ratios and other performance criteria used ...
  4. Stare Decisis

    Stare decisis is a legal principle which dictates that courts ...
  5. Alien Insurer

    An insurer that is formed following the laws of one country and ...
  6. Liberalization Clause

    Liberalization clause is an insurance policy provision that allows ...
Related Articles
  1. Taxes

    The Court Cases That Have Shaped US Sales Tax Law: How They Apply Today

    Explore two Supreme Court cases that established legal precedent for the treatment and apportionment of sales taxes at the state level.
  2. Taxes

    Tax Court: Your Last Resort

    Appealing an unfavorable or unfair tax ruling may be your last chance to save your finances.
  3. Personal Finance

    South State Completes Deal for Southeastern (SSB)

    South State Corp., the parent of South State Bank, announced the completion of its acquisition of Southeastern Bank Financial Corp.
  4. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  5. Insurance

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  6. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  7. Personal Finance

    Why We Need Antitrust Laws (MSFT, AAPL)

    A look at antitrust laws in the United States and the many anticompetitive practices they safeguard against.
  8. Insurance

    Insurance Companies Vs. Banks: Separate And Not Equal

    Insurance companies and banks are both financial intermediaries. However, they don't always face the same risks and are regulated by different authorities.
RELATED FAQS
  1. How does insurance underwriting differ from investment underwriting?

    Understand the difference between insurance underwriting and investment underwriting, including what types of risks an underwriter ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
  4. What companies have been targeted for anti-trust action in the 21st century?

    Several companies have been targeted for antitrust action in the past decade. These companies range from food service to ... Read Answer >>
  5. What is an antitrust law?

    Antitrust laws - also referred to as "competition laws" - are statutes developed by the U.S. Government to protect consumers ... Read Answer >>
  6. What is the usual profit margin for a company in the insurance sector?

    Learn what the average profit margin is within the insurance industry, and what factors can affect the profitability of an ... Read Answer >>
Hot Definitions
  1. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
  4. Pari-passu

    A Latin phrase meaning "equal footing" that describes situations where two or more assets, securities, creditors or obligations ...
  5. Interest Rate Swap

    An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for ...
  6. Custodian

    A financial institution that holds customers' securities for safekeeping so as to minimize the risk of their theft or loss. ...
Trading Center