Shields and Holvey take on the insurance industry

Kari Chisholm

The Unfair Trade Practices Act is a law that protects consumers from, well, unfair trade practices. But here's the weird thing: In Oregon, the insurance industry is the only industry exempt from it. And that puts small biz and consumers in a tough negotiating spot - and vulnerable to getting taken advantage of.

Sen. Chip Shields and Rep. Paul Holvey are pushing a package of reforms to fix that. As reported by Peter Wong at the SSJ:

Insurance companies are now exempt from the Unlawful Trade Practices Act, which bars fraud in business transactions, but a couple of bills would allow the Oregon Department of Justice to sue them. Some bills would extend the right to sue to individuals and small businesses. Insurance companies are expected to oppose the bills as unnecessary regulation. ...

"Too many businesses, medical providers, and consumers tell me that their insurance company is driving them to bankruptcy," Shields said in a statement. "If your insurance company blatantly won't pay the reimbursement that their big premiums or contracts are supposed to cover, it's wrong. It's time the Legislature protects small businesses and consumers by removing the insurance exemption."

How bad can it get? You might remember similar legislation getting a hearing two years ago - and Rep. Brian Clem's mother-in-law, Azusa Suzuki, testifying that her insurance company refused to reimburse some medical expenses because they claimed she was already dead. (Video above.)

Over at the Lund Report, Christopher David Gray has an excellent summary of the issues at play -- and the bill rundown:

House Bill 3160 and Senate Bill 686 roll insurance into the definition of real estate, goods and services that are covered in the Unlawful Trade Practices Act and allow consumers to recover economic and non-economic damages in court when insurers commit unlawful insurance practices.

House Bill 2525 and Senate Bill 513 allow the state attorney general and third-parties who are injured by an insured person to be compensated for damages and attorney’s fees.

Senate Bill 514 further lays out the process an insurer must go through before denying a claim and addresses steps an aggrieved party may take toward legal action.

High on the list of things to know: Washington does regulate the industry in this way, and the world hasn't come to an end:

Greg Price, an attorney from Vancouver, said Washington passed its Insurance Fair Conduct Act in 2007, and he’s heard the same Chicken Little arguments from the insurance industry then as he’s heard in Oregon.

“The sky is falling argument did not exist. Insurers didn’t leave,” Price said. “Claims are being settled sooner and costs are going down.” ...

“We really look at this in the role of the consumer’s eyes,” Holvey said. “In Washington, they do have an unlawful trade practices act, and I don’t see any huge difference in insurance premiums or why we can’t have this same protection in Oregon.”

Discuss.

By Kari Chisholm March 20, 2013 Posted in Video.