PUSHING THE ‘FLEMING FIX’

The Oregon Senate Business, Labor and Economic Development Committee moved a bill designed to correct a controversial state Supreme Court ruling on pollution exclusions to the Senate floor with a “do pass” vote. SB 440, known as the “Fleming Fix,” is designed to correct a 1999 Oregon Supreme Court ruling (Fleming v. USAA) that held that a dwelling policy’s pollution exclusion provision did not bar claims caused by a tenant’s illegal drug lab due to a technical flaw in a state-approved policy form. The National Association of Independent Insurers (NAII) and other industry groups collaborated on the bill, which essentially restores previous state practice regarding the requirements for exclusions in multi-peril policies. Since the Fleming ruling, insurers have compensated by adding exclusionary language to virtually every heading in all insurance policies. This cluttered up the readability of insurance policies and negated efforts the Division of Insurance had made over the years to make policies more understandable for consumers.