Democratic Gov. Joe Man-chin’s bill to eliminate third-party bad faith lawsuits survived a tough test March 17 when the Senate Judiciary Committee passed it out of committee over strenuous objections of Chair-man Sen. Jeffrey Kessler, whose Moundsville, W.Va., law firm handles personal injury cases.
Fellow Democratic Sen. Randy White, D-Webster County, tried to oVer three amendments to SB 418.
White’s first ammendment would have allow-ed third party bad faith lawsuits, but only after the original lawsuit was settled; the second would have allowed the insurance commissioner to award damages to someone who made a bad faith complaint against an insurer; while the third would have required more disclosure of insurance company records.
All three amendments were defeated on voice votes.
For the past two weeks, the normally reserved Judiciary chair has railed about SB 418 in state newspapers and on radio stations. Attacks focused on a recent report from Gov. Manchin’s office indicating policyholders could see $50 million in savings if SB 418 reforms are enacted.
“Lawmakers might as well rename the Capitol’s buildings after insurance companies–the Nationwide East Wing and the Allstate West Wing,” Sen. Kessler told the Charleston Gazette. “We’re selling our rights to a bunch of nameless, faceless folks walking around with bags of money. I’m opposed to selling our rights at any price.”
The issue of the $50 million savings also became part of the discussions during a public hearing.
Trial attorneys complained about how much money the property/casualty industry made last year and how eliminating bad-faith lawsuits was the “consumer’s only weapon against a low-ball offer from insurance companies.”
Insurance agents argued that SB 418 was not just about insurance reforms, but “improving the business climate in West Virginia.”
Meanwhile, the Gazette ran a story about a series of e-mails it acquired under the Freedom of Information Act.
The e-mails were sent to Insurance Commissioner Jane Cline, who had asked each company to estimate how much it might reduce its rates if SB 418 were enacted. The rate estimates were redacted because they are considered a trade secret.
Charleston attorney John Skaggs also filed a lawsuit against the insurance commission, arguing that he was denied the information used by the regulators in compiling a February report calling for elimination of third-party bad faith lawsuits.
“NAMIC is pleased the members of the Senate Judiciary Committee looked beyond the obvious stalling tactics of Senators Kessler and White and moved Senate Bill 481 out of committee,” NAMIC State Affairs Manager David Reddick said.
“However, I am offended by the personal attacks that Sen. Kessler has launched against certain property insurers. If he wants to get personal, perhaps the senator should come clean with his Senate colleagues and tell them how much money his law firm made last year on bad faith lawsuits that it filed. It makes one wonder whether the senator’s statements are intended to protect his constituents, or his own pocketbook.”
SB 418 now goes before the Senate Finance Committee, where it is expected to pass, and then to the full Senate and House of Delegates–opponents are likely to make one last stand in the House Judiciary Committee.
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