Oregon House Passes SB 414 Giving Insurance Commissioner Greater Authority

A significant win for individual consumers in the often frustrating and never fair battle for coverage, it remains to be seen whether these new powers granted
to the Commissioner will assist commercial lines consumers.    "6.28.13: House" http://feedly.com/k/127kunW

Oregon Court of Appeals Confirms Holding on Attorney Block Billing

The Oregon Court of Appeals has issued a clarification of its prior decision in the long running ZRZ Realty ("Moody Avenue") environmental coverage litigation concerning attorney fees.  See link below.  The procedural aspects are of little concern other than to the litigants but it is worth noting that the court confirmed the prior decisions holding that block billing of attorney time did not necessarily render the fees unreasonable or unrecoverable. This holding has been helpful to policyholders trying to recover past defense costs from carriers that deny a defense and force the insured to litigate, something that is all too common because Oregon lacks bad faith legislation, a situation that the pending HB 3160 would help to rectify.   And as the Zidell folks pointed out in supporting that bill, if a bad faith claim had been available to them in the first place this whole multi year litigation might never have been necessary!

http://www.publications.ojd.state.or.us/docs/A121145c.pdf

Senate Passes SB 414, Giving Oregon Insurance Commissioner Power to Order Restitution

Congratulations to Sen. Shields and his allies for getting this through.  Somewhat bittersweet, as I've reported before.  The need for a bad faith cause of action or direct right action under the Claims Handling statute was brought home yet again for me today when I heard this story: a single-family homebuilder in Dallas was sued by a disgruntled customer, tendered to his insurance company which initially accepted the defense but then yanked the defense (and even tried to prevent the builder from continuing on with the same lawyer) after it hired coverage counsel who advised the insurer not to defend based on a grossly unfair contortion of the allegations against the builder as being excluded, in violation of every precept of Oregon law culminating with the Bresee decision that I blogged about earlier.  Builder had to settle the claim with his own money and then find a lawyer to sue the insurance company, which is (amazingly) still contending that it did nothing wrong.  Fortunately a good friend was willing to take it on contingency.  A perfect example of the "free breach" thinking that carriers in Oregon employ to try to keep as much of their customers' premiums as they can without having to provide coverage.

Senate votes to hold insurance companies accountable through increased agency authority:

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Oregon Supreme Court's Bresee Decision Makes the "Headlines"

The good folks at the large national firm Farella Braun posted this excellent summary of the Oregon Supreme Court's late-2012 decision in Bresee v. Farmers Insurance Exchange.  In Bresee the court made it clear that an insurer's decision to provide a defense under a liability policy must be based on only the words of the underlying complaint or other charging document itself, and that any ambiguity -- any ambiguity, including one created by the lack of specific allegations -- is construed in favor of providing the defense.  In that specific case the insurance company denied a defense based on a "completed operations" exclusion based on the insurance company's interpretation of the underlying complaint, which is said indicated that the property damage had occurred after "operations" were "complete."  As Farella's blog post points out, the court's admonition to insurance carriers that they cannot use such "reading between the lines" to deny a defense is a straightforward proposition - so straightforward, in fact, that most states permit a policyholder who is denied a defense to seek punitive or exemplary damages, via a bad faith claim, to deter insurance companies from the practice.  Unfortunately, unless HB 3160 or something like it passes, insurance companies will continue to ignore Bresee and its forebears (which they do, every day) because even though it is a clear-cut breach of their obligations to policyholders, in Oregon insurers get a "free breach," as I explained in my recent letter to Senator Betsy Johnson in support of HB 3160/the SB 414-A amendment.

Vote on SB 414, Permitting Insurance Commission to Order Restitution, Set for Today

Whether this bill will be useful to small business remains to be seen, but it is certainly a step in the right direction. However, as the "preferred alternative" by the insurance industry to real insurance claims handling reform, one has to assume that the industry will exert its pressure to keep the benefits of this change in the law restricted to consumers, who may remain unaware of the availability of recourse to the state's complaint process.

K-12 budget meltdown, wine and beer: Oregon Legislature today | OregonLive.com:

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A Nice Summary of How Insurance Reform In Oregon Has Fared This Legislative Session

The Lund Report has a great piece today recapping how it came to be that SB 414 and SB 814 moved through the Legislature while HB 3160 has stalled, again.  It continues to be painful to see how successfully the insurance industry has distorted the issues and the relationship between a private right of action and the regulatory oversight exercised by the Insurance Commission.  As my former colleague Jim Guse of Ball Janik points out in this piece, Washington's bad faith law has had the entirely salutary effect of shortening the time in which claims are paid, and removing the incentive that carriers now have in Oregon to "roll the dice" on coverage litigation, exposing their small business insureds (in liability cases) to potentially disastrous consequences - including unpaid judgments, which for a contractor can mean the loss of a license.

Shields Pushes to Empower DCBS as Effort to Put Insurance Under UTPA Flounders | The Lund Report:

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Insurance Industry Invests Heavily in Defeating Bad Faith Legislation

HB 3160, which among other things would give small business owners a private right of action against insurance companies for violating the state Unfair Claims Settlement Practices Statute, is still alive as the legislative session draws nearer its close, and the insurance industry and those that might be held to account under the bill continue to invest heavily in lobbying efforts to make sure that it again does not make it to the floor.  Among the canards that the industry continues to throw out there is that this is 'radical' reform, but failing to note that most states have some version of this kind of private right of action, or some other bad faith right of action, under state law.  I recently worked on a survey of bad faith law in the Pacific Northwest as my firm continues to expand its practice base, and was dismayed to note that Oregon lags behind even conservative states like Montana and Idaho in giving small business owners the leverage that they need, through a potential bad faith claim, to get insurance companies to step up when the going gets rough.  My Father's Day wish?  That the legislators currently on the fence, including Sen. Betsy Johnson, realize that this bill is not about enriching "tort lawyers" but is about bringing the insurance code into the modern era to protect ordinary Oregonians, including Oregon's small business owners.


Dozens of lobbyists tie up bill to let consumers sue insurance companies | OregonLive.com:

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