No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

other states, Illinois cannot apply its consumer fraud statute to regulate State Farm’s
specification of non-OEM parts in 47 other states and the District of Columbia.
Indeed, the prohibition against extraterritorial regulation applies with even greater
force in the context of insurance transactions, because in enacting the McCarran-Ferguson
Act Congress expressly left insurance regulation to the discretion of each of the “several
States.” 15 U.S.C. §§ 1011, 1012. As the Supreme Court has observed, “[i]t is clear [from
the legislative history of the Act] that Congress viewed state regulation of insurance solely
in terms of regulation by the law of the State where occurred the activity sought to be
regulated. There was no indication of any thought that a State could regulate activities
carried on beyond its own borders.” FTC v. Travelers Health Ass’n, 362 U.S. 293, 300
(1960) (emphasis added). In fact, even before enactment of the McCarran-Ferguson Act, the
Supreme Court had repeatedly held that states may not apply their own insurance statutes
to insurance policies that were entered into in other states. See, e.g., Aetna Life Ins. Co. v.
Dunken, 266 U.S. 389, 399 (1924) (Texas statute cannot govern Tennessee insurance
policy); New York Life Ins. Co. v. Head, 234 U.S. 149, 161 (1914) (Missouri statute cannot
govern New York insurance policy). Cf. Robertson v. California, 328 U.S. 440, 459-61
(1946) (holding that California has strong interest in regulating local activities of foreign
insurer, and rejecting extraterritoriality challenge because California had not tried to regulate
the insurer’s conduct outside California).
Notwithstanding this settled law, plaintiffs convinced the circuit court to assure
“uniformity of treatment” for a “classwide practice” by applying ICFA to all class members’
claims. C. 17051. But, as the Supreme Court made clear in BMW, no state has the power
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