The opinion of the court was delivered by: LORD, III
The defendants are charged with thirty counts of mail fraud, 18 U.S.C. § 1341. They are accused of devising a scheme to defraud and to obtain money from numerous insurance companies by means of false representations, specifically failure to disclose fully the existence of other insurance coverage in their applications for policies and in claim forms submitted following an accident. The mailings on which the claimed violations of section 1341 are based are applications for policies, requests for claim forms, submission of claim forms and supporting documents, and causing the mailing of checks in payment of claims.
The defendants applied for numerous health and accident insurance policies between 1969 and 1975. In neither the applications nor in the later submitted claim forms did defendants fully disclose other insurance coverage which they then had, despite specific requests for that information in the forms. On July 2, 1975 both defendants were involved in a car accident and both suffered injuries requiring medical treatment including hospitalization. Defendants then submitted claim forms seeking payments under the policies. Though the indictment and the Government's case both implied that the accident might have been staged, the Government conceded it could not prove that it was not a legitimate accident or that the defendants' injuries were either non-existent or exaggerated.
There is no doubt that the defendants failed to disclose the existence of other insurance coverage in their applications for policies and in the claims forms. I hold, however, that as a matter of law, these non-disclosures do not constitute violations of 18 U.S.C. § 1341.
II. THE MAIL FRAUD CHARGES
In this case, unlike most alleged mail fraud schemes, state law plays a decisive role in determining the existence vel non of a criminal scheme. The McCarran-Ferguson Act, 15 U.S.C. § 1011, states:
Congress declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States.
The Act goes on to state:
(a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.
(b) No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance ... unless such Act specifically relates to the business of insurance ....
15 U.S.C. § 1012. The mail fraud act does not specifically refer to the business of insurance. Although the original version of the mail fraud act existed at the time Congress passed the McCarran-Ferguson Act, Congress did not exempt mail fraud from coverage.
The mail fraud act has since been amended but no specific mention of the insurance business was added to section 1341. Cf. Spirt v. Teachers Insurance and Annuity Association, 475 F. Supp. 1298 (S.D.N.Y.1979) (Title VII cannot override state regulation of the business of insurance absent explicit reference to insurance).
The Supreme Court has left no doubt that the Act contemplates state control over the connection between insurer and insured through the conduit of the insurance policy. In SEC v. National Securities, Inc., 393 U.S. 453, 460, 89 S. Ct. 564, 568, 21 L. Ed. 2d 668, 676 (1969), Mr. Justice Marshall said:
Pennsylvania has adopted a comprehensive and detailed code, the Insurance Company Law of 1921, 40 P.S.A. § 361 et. seq. ...