Tort Reform, Credit, Producer Licensing on Agenda for 2002 Ohio Legislative Session

According to the National Association of Independent Insurers (NAII), Ohio insurers are poised to actively participate in the 2002 Ohio Legislative session, during which insurance issues such as tort reform, credit and producer licensing are slated for consideration.

In addition, the NAII said insurance companies will keep a close eye during this election year on campaigns for seats on the Ohio Supreme Court.

“The NAII and its member companies will watch and weigh-in support for state supreme court candidates who are committed to a more moderate approach to the court and a clearer interpretation of Ohio law,” said Robert Hurns, NAII counsel. “Clearly, the current four-seat majority on the court has failed to follow the Ohio Legislature’s intent in several decisions involving the business community, such as creating auto insurance coverage where none was intended.”

In light of the election year-during which the Republicans are expected to remain in control of the House, Senate and governor’s office-and the much anticipated debate about education reform and methods to solve a $1.5 billion budget deficit, several insurance issues are predicted to receive ample airing including: tort reform, credit and producer licensing.

Three bills are winding their way through the legislature that would offer relief to Ohio taxpayers, health care professionals and businesses.

SB 120, which passed the Senate and awaits action in the House, would modify joint and several liability to apply liability more proportionally. Under current law, when two or more defendants are liable for the entire economic loss suffered by a plaintiff, both are liable for the entire damage award, regardless of their share of the fault.

Provisions under SB 120 would prohibit defendants found to be less than 50 percent at fault in a tort lawsuit from being assessed more than their proportional share of any damages. It would restore fairness and accountability for those who should bear the brunt of paying lost income, medical costs and other related expenses, Hurns said.

SB 106, which advanced through the Senate and remains in the House, would expand government-school districts, municipalities, counties and townships- immunity in tort cases. Again, Ohio taxpayers would not unfairly pay for damages, settlements and fees from frivolous lawsuits if this bill takes effect.

SB 179, a third tort reform bill, would expand Ohio’s professional peer review law enjoyed by hospitals to other health care entities, such as nursing homes and outpatient surgery clinics. Each of these three bills contain changes that were part of a comprehensive tort reform act deemed unconstitutional by the Ohio Supreme Court in 1999. However, these bills cover areas not cited in the court’s opinion.

Two draft bills addressing credit issues have been circulated-one that would place an outright ban on the use of credit scores in underwriting, while the other would prohibit credit scores as the “primary factor” in underwriting.

“Even though many studies prove the positive correlation between credit scores and the filing of insurance claims, the bill sponsors are not accepting the full picture,” Hurns said. “Insurers report that using credit scores make insurance available to more consumers at a lower cost. It is an underwriting tool that should be preserved as it benefits consumers.”

A producer licensing bill, SB 129 is too restrictive of customer service representatives who make adjustments to policies, according to the NAII. The legislation, which passed the Senate and is expected to sail through the House during the first three months, needs a broader exemption of individual license requirements.

Supporting the so-called reciprocity requirement would enable a licensed agent or broker in good standing in his or her home state to be automatically granted nonresident licenses by other states.

“Reciprocity is key to preserving state regulation of insurance while streamlining the agent and broker licensing process,” Hurns said. “Otherwise, companies that conduct business in multiple states will not be able to provide immediate, around-the-clock service-an important customer service as the presence of e-commerce expands in the marketplace.”

Other insurance issues that are likely to be addressed include securing a sponsor for red-light camera legislation and efforts to thwart a state Uniform Computer Information Transaction Act (UCITA), which would allow software manufacturers to threaten disruption of a software user’s critical system, such as a claims paying program, without court approval if there was a dispute over the use of the software.

Regulatory modernization and privacy issues will return, but are not as urgent as other public policy initiatives, Hurns said.

Topics Legislation Ohio