Ohio Insurance Director Lee Covington has filed a court action seeking to persuade a New Mexico court not to impose another state’s insurance laws and increased costs on Ohio insurance consumers.
Covington filed the motion June 10 in the Court of Appeals in Santa Fe County, New Mexico, to support the appellant Federal Kemper in Berry v. Federal Kemper Life Assurance Company, a suit filed in district court Nov. 1, 2001. On May 31, 2002, the trial court entered an order certifying the case as a national class action suit, including policyholders residing in Ohio.
The lawsuit claims insurance policyholders who pay their premiums monthly or quarterly (modal) instead of annually are being unfairly discriminated against because they are required to pay an additional fee for the right to make modal premium payments. The suit also claims that the company fraudulently disclosed that information to policyholders.
While not taking a position on the nature of the premium payment dispute, Covington is seeking to intervene, claiming that a court in New Mexico cannot adequately address the concerns of Ohio policyholders. If the matter is certified as a national class action, the regulatory authority of the Ohio department and Director Covington will be undermined and a degree of uncertainty impermissible under current Ohio insurance law will be imposed upon the state’s insurance marketplace, according to the Department.
Covington is requesting that the appeals court reverse the decision of the trial court which certified the class action or that Ohio be permitted to opt-out of any settlement or judgment on behalf of all Ohio policyholders.
“The Ohio Department of Insurance has been given the responsibility to protect Ohio insurance policyholders and to address their concerns,” Covington said. “I am fundamentally against allowing a court in New Mexico or any other state to make policy that will affect Ohio insurers and insurance consumers.
“It is important that it remains clear that the Ohio Department of Insurance is the sole authority in this state to regulate the business of insurance,” added Covington. “Lawsuits such as these have the potential to significantly undermine the Department’s authority to fulfill its mission.”
Topics Lawsuits Ohio Mexico New Mexico
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