FTC Updates HSR Antitrust Thresholds: Impact on Insurance Compliance
On January 16, 2026, the Federal Trade Commission (FTC) updated key reporting thresholds under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, according to the Federal Register. These annual adjustments often align with shifts in the gross national product unless economic downturns like a recession occur. From February 17, 2026, the "size-of-transaction" threshold will increase from $126.4 million to $133.9 million, affecting transactions finalized on or after that date, with crucial implications for compliance and risk management in the insurance industry.
Threshold Changes and Reporting Requirements
This update includes a revision to the statutory thresholds under Section 8 of the Clayton Act, effective immediately. The revised "size-of-transaction" threshold mandates HSR filings for transactions closing on or after February 17, 2026, if the acquiring party's holdings in voting securities, non-corporate interests, or assets surpass $133.9 million. Transactions valued between $133.9 million and $535.5 million depend on the "size-of-person" test—met if one party holds assets or annual sales of $267.8 million or more, with the counterparty holding $26.8 million or more. For acquisitions over $535.5 million, no size-of-person test applies.
Notification Thresholds and Fees
The notification thresholds for voting securities acquisitions are divided into five levels, notably when an entity gains control by securing 50% or more of an issuer’s voting securities. Effective February 17, 2026, these thresholds will reflect updated tiers. Additionally, the FTC announced adjustments to the HSR filing fees to align with the Merger Filing Fee Modernization Act of 2022, based on the transaction's value as per HSR rules, commencing on the same date.
Ensuring Compliance with Regulatory Requirements
Understanding previous thresholds is crucial for reviewing HSR noncompliance risk or disclosing past acquisitions. Noncompliance can result in severe penalties, currently at $53,088 per day, with increases anticipated due to inflation. Furthermore, the FTC revised the threshold for interlocking directorates under Section 8 of the Clayton Act to $54,402,000 from the initial $10 million set in 1990, highlighting the necessity for vigilant regulatory compliance. This revision generally prevents officers or directors from serving two competing companies crossing this financial threshold, exempt for competitive sales under $5,440,200.
These changes underscore the importance for companies to stay compliant with antitrust regulations to avert legal repercussions and penalties. Staying informed on threshold updates and regulatory adjustments is essential for industry players to not only manage risks but also to ensure seamless operations amid evolving compliance landscapes.