What does the McCarran-Ferguson Act state about state and federal law?

The McCarran-Ferguson Act, enacted in 1945, is significant in delineating the relationship between state and federal regulation of insurance. It establishes the principle that states have the authority to regulate the insurance industry, meaning that states can create and enforce regulations specific to insurance practices. The act emphasizes that this state regulation should be maintained, providing the states the flexibility to govern insurance in a manner they see fit.

While it acknowledges the existence of federal law, the act specifically states that federal law does not automatically take precedence over state law when it comes to insurance regulations. This means that, while states must comply with federal law in general, they have the discretionary power to regulate the insurance market as they choose, unless there is an explicit federal statute that pertains directly to insurance. Therefore, the correct understanding is that states have the autonomy to regulate insurance without being overridden by federal laws, aligning with the selected answer regarding state regulation of insurance.