Washington senators have approved a proposed Insurance Fair Conduct Act, passing it 31-18 mostly along party lines. The bill, which would prohibit the practice of delaying or denying an insurance claim without proper cause, and would allow the policyholder to collect triple damages if the insurance company unreasonably denies a claim or violates unfair practice rules, has been sent to Gov. Chris Gregoire for her signature.
The American Insurance Association, National Association of Mutual Insurance Companies and Property Casualty Insurer Association of America had opposed the bill, saying that lowering the threshold for first-party bad faith claims against insurers would “encourage frivolous lawsuits” because there is an incentive for insureds to litigate. Plaintiffs who prevail under a bad faith claim are routinely awarded attorney’s fees and costs,” they said.
House Republicans generally agreed, lambasting trial lawyers as money-grubbers who will drive up insurance rates with their litigation. The bill eventually passed the House on a mostly partyline 59-38 vote.
Democratic House Majority Leader Lynn Kessler said the bill is an important consumer protection and some of the 4,000 people who file complaints each year will have greater recourse to the courts to get satisfaction from their insurance companies.
“This is for all the people who get stiffed by their own insurance company,” she said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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