Oregon Bill That Would Assist Insurers In "Lost-Policy" Battles Dies

Those of us in the coverage game who deal with "long-tail" claims -- that is, claims under older occurrence-based policies -- routinely have to deal with a common problem: the policies are gone.  Businesses destroy old records, change hands, have a flood, etc., and the old insurance policies are gone.  Professional records managers are now trained to keep insurance policies forever and many have digitized their insurance archives.  But for those without such an archive the "lost-policy" battle with the insurance company (and often multiple carriers) can turn into a real bruiser.

This year the insurance industry proposed an innocuous-seeming bill in the Oregon legislature that would have permitted insurance companies to unilaterally cease sending the full copy of a new insurance policy to the policyholder, instead giving the policyholder a link to the policy forms hosted on the carrier's website.  The bill would have only required the carrier to keep the link live for the term of the policy, and would have only required the policy to be archived for ten years.  This bill appeared to have been part of a nationwide push by industry to save money, and trees (a laudable goal), by delivering policies electronically.  The difference in the Oregon bill, however, was that it did not permit policyholders to choose not to participate in the new scheme - every other piece of legislation that I could find required the policyholder to "opt in" before the carrier was excused from doing things the "old-fashioned" way.

I penned a letter to the chair of a Senate committee hearing this bill, available here, and testified against the bill.  More detail on the problems that I saw with the bill, and in particular the further leg-up that it would give insurers in future lost-policy battles, is in the letter.  The bill stalled in committee and died with the end of the short session.

This is a good example of how even small, seemingly insignificant, and possibly well-intentioned changes to the insurance code can have unforeseen repercussions in insurance coverage disputes.  Hopefully now that the policyholder bar is a bit more organized we can engage the industry on every change, not just the big ones.