The Professional Insurance Agents (PIA) of Washington has issued a statement, noting it is discouraged by the decision of Governor Chris Gregoire to sign Washington’s ESSB 5726 into law.
The law, which will take effect on July 22 and is known as the Insurance Fair Conduct Act, increased allowable monetary damages claimants are able to collect from insurers, requires payment of costs and attorneys’ fees, and permits the courts to award triple damages as a punitive measure.
PIA Washington/Alaska Executive Vice President Clark Sitzes said the its members agree with those of the American Insurance Association, the National Association of Mutual Insurance Companies and the Property Casualty Insurers Association of America that the decision will be detrimental to Washingtonians.
“More liability for insurance companies and the potential of a lawsuit in every policy written is not good for business and it is definitely not good for consumers,” Sitzes said. “All it will lead to is higher premiums because of a rise in risk for insurance companies.”
He noted that Washington State already has consumer protection laws, with the right to sue for breach of contract, bad faith and other issues and recover damages as well as attorneys fees.
“Washington State also has an insurance commissioner and department of insurance that place consumer well-being above all else,” Sitzes added. “They are tireless watchdogs for the consumers of this state and that also makes this law totally unnecessary.”
The problem with the law, the association said, is that there is an assumption that the insurance companies are not taking care of their obligations. “The insurance companies writing business in Washington State care about the consumers they insure,” Sitzes said. “For proof you need look no farther than the statistics generated by the catastrophic windstorms of last winter. Hundreds of claims filed and the Washington Department of Insurance received virtually no complaints about failure to honor insurance .”
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