Minn. Lawmakers Consider Bad Faith Proposals

March 9, 2007

Minnesota lawmakers are considering proposed legislation which would authorize additional legal action against insurers when investigating suspicious claims.

The Property Casualty Insurers Association of America (PCI) say if the proposal is enacted, it will increase the price of health, auto, homeowners and commercial liability insurance in the state.

Legislative committees are now considering House File 1251 and Senate File 1152 and action is expected in the coming weeks.
Both legislative proposals would authorize additional legal action against insurers for attempting to investigate questionable insurance claims.

Ann Weber, vice president and counsel for PCI said that “insurers are committed to settling claims in a quick and fair manner and we stand on our track record of consumer satisfaction. The net effect of this legislation would be to discourage insurers from protecting its policyholders’ interests by investigating suspect claims and effectively fighting against fraud and arson.”

Weber said that Minnesota already has strong laws to address circumstances where there are disputes over claims handling practices. These bills would not add additional consumer protections.

“Acting in good faith means paying legitimate claims and ferreting out those that are fraudulent,” said Weber. “These measures would make it harder and more costly for insurers to fully perform their duty for consumers. ”

Source: PCI

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