The American Insurance Association lauded the Oklahoma Legislature’s approval of what the AIA called “a landmark rating bill,” which institutes a file and use system for all lines of insurance except workers’ compensation.
“Overall, this is a tremendous victory for insurers. While major negotiations took place with the trial bar, we are very happy with the outcome,” said John Marlow, assistant vice president, AIA Southwest Region. “By passing this comprehensive rating reform bill for both commercial and personal lines of insurance, Oklahoma is taking a huge step toward creating a truly competitive market for insurance consumers.”
The major tenets of HB 2470 include the following provisions that the insurance industry, led by AIA, supported:
· A file and use rating system for all lines of insurance except workers’ compensation that is based on the National Conference of Insurance Legislators (NCOIL) model language.
· The overturning of a court case referring to “owned but not insured” for auto liability, which now prevents auto owners from claiming uninsured motorist coverage without having minimum liability coverage on the auto involved in the accident.
· Civil justice reform that enables declaratory judgments in civil suits involving insurers.
Several provisions were negotiated with the trial bar and agreed to by the insurance industry, including:
· An increase in minimum limits for auto policies from the current 10/20/10 minimum limits to 25/50/25. These new limits now put Oklahoma into the mainstream of other states.
· Allowance for discovery of policy limits in homeowners suits. This is currently allowed only in auto suits.
· In cases where the claim is $25,000 or less, if a doctor is required to testify in court, a written statement can be submitted in lieu of making an actual court appearance.
“This bill will ultimately benefit the consumers of Oklahoma by ensuring that a competitive market will thrive and that insurers will be allowed to compete on both price and product in almost all lines of insurance, especially on personal lines,” Marlow added.
The bill will be sent to Governor Brad Henry (D) for his signature.
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