Minnesota Court Gives A.G. Authority Over Insurers

A Minnesota Court of Appeals has ruled to support the state attorney general’s authority to sue insurance companies. The decision stems from a lawsuit filed against the American Family Mutual Insurance Co. by Attorney General Mike Hatch in March 1999. The suit alleges American Family violated the state’s consumer protection laws and regulations of insurance trade practices during the insurer’s payment of claims for storm damage to homes after a series of severe summer storms. American Family contends the state Commerce Department had exclusive authority over insurance companies and the attorney general did not have independent authority to bring a lawsuit against an insurer. The district court ruled that the attorney general and Commerce Department had concurrent authority. The Court of Appeals affirmed that position this week. The decision is disappointing to several insurance trade groups, including the National Association of Independent Insurers. “The Department of Commerce regulates insurers in Minnesota. But thanks to this ruling, the attorney general can take independent actions against the company,” said Laura Kotelman, NAII associate counsel. “This additional oversight by an agency that has little expertise in how an insurance company operates is unnecessary and unduly burdensome.”

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