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The Insurance industry is failing the consumer. The concept of fraud is being used by the insurance industry to deceive the public. "Our current national health care system is simple: don't get sick."

 

     
 

Governor of Washington Signs Insurance Fair Conduct Act into Law
Insurance Coverage Alert
by Todd L. Nunn, Marla L. Goodman. May 2007

http://www.klgates.com/newsstand/Detail.aspx?publication=3819

On May 15, 2007, Governor Chris Gregoire signed the Insurance Fair Conduct Act into law.[1]  The bill expands the definitions of unfair insurance practices under RCW 48.30.010 and adds new remedy provisions to chapter 48.30, to allow policyholders to sue insurers for unreasonable denials of coverage or of payments of benefits.  These new bases for a policyholder claim are in addition to the breach of contract and bad faith claims already available.  The key provisions of the bill are:

     
  • The new remedy is available to an individual, corporation, association, partnership or any other legal entity who asserts the right to payment as a covered person under the insurance policy or insurance contract at issue.
  • Damages are available upon a finding that (a) the insurer unreasonably denied coverage or payment; or (b) the insurer violated one of five rules already adopted by the Office of the Insurance Commissioner (OIC) to regulate insurer conduct or any additional rules that the OIC adopts that are intended to implement the Act.  The five current rules govern insurers’ conduct in the following areas: (1) specific unfair claims practices;[2] (2) misrepresentation of policy provisions;[3] (3) failure to acknowledge pertinent communications;[4] (4) standards for prompt investigation;[5] and (5) standards for prompt, fair and equitable settlements.[6]
  • Before suit can be filed, a claimant must provide 20 days written notice to both the insurer and the OIC.  The notice must provide the basis of the cause of action.  If the insurer does not resolve the claim during that 20-day period, the claimant may then bring suit without further notice.
  • If a court finds the insurer violated the Act, the court must award the actual damages sustained, reasonable attorney’s fees and actual and statutory litigation costs, including expert witness fees.
  • The court has the discretion to also award treble damages.
  • The bill does not limit the court’s authority to make any other determination regarding unfair or deceptive practices or to provide any other available remedy.
  • The bill exempts health plans offered by health carriers.[7]
     

The bill was sponsored by the Senate Committee on Consumer Protection & Housing.   Senators Weinstein, Kline and Franklin were the original sponsors.  It will become effective 90 days from the date of signing.