Washington faced one of its most contentious and expensive insurance battles in history, in the fight over the Insurance Fair Conduct Act, or Referendum 67. In 2007, the state legislature enacted a law allowing insured's to collect triple damages if their insurer unreasonably denies a claim or violates unfair practice rules. While the legislation was approved and supported by Insurance commissioner Mike Kriedler, the industry believed the law would lead to frivolous lawsuits. More money and time spent fighting or settling lawsuits would mean costs would be passed onto consumers, the
industry indicated.

As such, insurers took the issue to the voters, putting referendum 67 on November's ballot. The insurance industry hoped consumers would overturn the law, if they recognized that the measure could increase insurance premiums on average of $205 per year.

Costly campaigns were created to sway voters leading up to the election. Trial lawyers and insurance companies spent nearly $14.5 million just days before ballots were tallied. In the end 57 percent of voters approved the law. Supporters said the referendum fit the voter's pocketbook-first mentality that if they pay for an insurance policy, they expect to
get paid when they submit a claim. The National Association of Mutual Insurance Companies has vowed to work with legislators in 2008 to repeal the law.

Insurance Journal
Vol. 85, No. 24
Western Region
December 24,2007