The Supreme Court case United States Department of the Treasury and Mitchell A. Levine, Assistant Commissioner v. George Fabe, Superintendent of Insurance of Ohio (1992) revolved around a conflict between federal and state law regarding insurance company liquidations. The McCarran-Ferguson Act gives states the power to regulate insurance companies unless federal law specifically relates to the business of insurance. When an Ohio-based insurer went bankrupt, its assets were distributed according to Ohio's priority statute which favored policyholders over other creditors including the U.S government who had tax claims against it. The U.S argued that this violated Federal Priority Statute which requires insolvent debtor’s estate pay off any debts owed to US before others are paid out. The Supreme Court ruled in favor of Fabe stating that while part of Ohio's statute was preempted by federal law because it did not 'specifically relate' to the business of insurance as required by McCarran-Ferguson Act; however, those parts giving preference for policyholder claims were upheld since they protected policyholders - a key aspect related directly with business operations within an insurance industry.

In the dissenting opinion for United States Department of Treasury v. George Fabe, Justice Blackmun argued that the majority's interpretation of the McCarran-Ferguson Act was too narrow and failed to consider Congress' intent when passing it. He believed that Congress intended to grant states broad regulatory power over insurance companies without federal interference unless there was a direct conflict with federal law. The majority's decision, he contended, undermined this intention by allowing federal laws that do not specifically relate to insurance but have some impact on it to preempt state regulations. This could potentially open up a wide range of state insurance regulations to preemption by unrelated federal laws - an outcome he felt contradicted Congressional intent behind the McCarran-Ferguson Act.