Bob Hunter and Jay Angoff {op-ed, June 24} argue that the McCarran-Ferguson Act of 1945 -- the law that expresses the intention of Congress that the regulation and taxation of the business of insurance by the several states is in the public interest -- "boosts insurance costs" by allowing insurance companies to require, and insurance agents to agree, that all agents will charge the same commission. They contend that laws requiring such arrangements ("fair-trade" laws) have been abolished with respect to practically all industries and that the McCarran Act should be repealed to accomplish the same result for insurance.

State fair-trade laws authorized manufacturers to specify resale prices for their products. Agreements between sellers and buyers fixed the price at which buyers could resell. Once a seller entered into such a contract with even a single retail buyer in a state with a fair-trade law, even non-signing retailers of this "fair-trade agreement" would be bound by it, under penalty of law. These resale price-maintenance agreements were saved from challenge under the price-fixing prohibitions of the federal antitrust laws by a special exemption from the Sherman Act. In 1975, this special exemption was repealed by Congress, and now resale price-maintenance agreements are unlawful.

For purposes of the laws that prohibit rebating of agents' commissions, the critical distinction is that agents selling life insurance, for example, are not retailers purchasing from manufacturers or wholesalers. They are not buyers or retailers at all; in law, they are agents engaged in the sale of a principal's product, and thus there is no "resale" involved.

To argue that the insurance agent should be permitted and even encouraged to cut the price of the insurance product by a percentage of the commission because the fair-trade laws have fallen is to argue that sales people of every kind and description should cut the cost of products and services by giving the buyer a part of their own personal income. This would produce inequitable results indeed: passengers do not seek to obtain reduced air fares by asking the pilot for a part of his salary. H. JAMES DOUDS Senior Vice President and General Counsel The National Association of Life Underwriters Washington