A bill currently pending before Oregon’s legislature seeks to give consumers new protections and close a significant legal loophole. As reported recently by the Salem Statesman-Journal, both houses of the Oregon legislature are considering legislation that would end the insurance industry’s exemption from Oregon’s Unlawful Trade Practices Act. This important legislation promises important new protections for Oregon consumers by holding insurance companies accountable for the damage they do when they delay, or refuse, payment on legitimate claims.
As detailed by The Lund Report, a health policy blog, the legislation (HB 3160 and SB 686) will “allow consumers to recover economic and non-economic damages in court when insurers commit unlawful insurance practices.” Put another way, it will allow ordinary Oregonians to level the playing field against companies that refuse to play by the rules.
As the Statesman-Journal reports under existing law, insurance companies are not covered by the Unlawful Trade Practices Act. That exemption, in practice, allows them to mistreat customers by denying them the coverage they have paid for. The Lund Report quotes one of the bills’ sponsors, Sen. Chip Shields (D) of Portland, noting that “insurance is the only business that is exempt from this law.” That exemption makes it much easier or insurance companies to put their own financial interests ahead of the health and welfare of ordinary Oregonians.
As The Lund Report notes, Economic Fairness Oregon, a consumer advocacy group, is supporting the legislation because it “is designed not to increase lawsuits but encourage insurers to settle honest claims more expeditiously and fairly so consumers can avoid the courts.”
That is an important point, and one that bears restating. The goal here is to help Oregonians get the justice they deserve, and the coverage they pay for. No one should lose their house or their business because an insurer, thinking about its own bottom line, delayed paying a claim. Courts are not designed to be our first recourse when confronted by injustice, but rather our final firewall against it. Giving citizens the ability to use the courts to defend their rights is not an attack on business – because responsible businesses will rarely find themselves in court – but a way of protecting everyone from the excesses of a few. As a Portland consumer protection lawyer I know how important it is to ensure that everyone has the right – and the ability – to demand the equal treatment we all deserve. Insurance companies should not be exempt from the requirements to deal fairly with their customers that apply to the rest of our state’s business community.
The Lund Report: Shields and Holvey want Unlawful Trade Act to Cover Insurers
Salem Statesman-Journal: Bill would let state sue insurance companies for fraud