Insurance Competition Act of 1986 - Revises the applicability of the Federal antitrust laws to the insurance industry. Specifies limited activities that may be subject to an exempt agreement, understanding, or concert of action between or among insurers, members of an advisory organization, or other persons. Provides that no agreement, understanding, contract, or combination among such parties to fix rates or proposed rates for commercial risk insurance shall be exempt from such laws by reason of any State law, rule, or regulation permitting, but not requiring, any such agreement, understanding, contract, or combination. Permits insurers participating in joint underwriting pools, or residual market mechanisms to cooperate with each other in the following activities if the residual market mechanism is required by law or approved by a government agency, or if the joint underwriting pools do not unreasonably restrain trade: (1) making rates, rating systems, policy forms, underwriting rules, surveys, inspections, and investigations; (2) furnishing loss statistics; and (3) carrying on research on causes or the prevention of losses. Permits any State to: (1) establish or approve a residual market mechanism; and (2) require a workers' compensation and employers' liability insurer to adhere to the uniform classification system and uniform rating plan applicable to such types of insurance in such State.