Wednesday, October 24, 2007

WA State Insurance Commissioner Mike Kreidler sends out an email letter urging approval of Referendum 67

Letter from Mike Kreidler to Noemie Maxwell

Dear Noemie,
Please join me in voting to Approve Referendum 67 this November.

Every year, my office receives thousands of complaints from auto owners, homeowners, property owners, and small business owners about delays and denials of legitimate insurance claims.

That's unacceptable -- and that's why I'm urging all Washington voters to Approve Referendum 67.

Please join me and show your support for Referendum 67 -- invite your friends and family to sign the Approve 67 online petition now!

Consumers just want their insurance companies to honor the commitments they made to them. Referendum 67 will help ensure that insurance companies treat Washington consumers fairly. It's a common sense ballot measure that's good for the hard-working people of our state.

Unfortunately, the insurance industry is threatening to spend nearly $8 million to try to defeat Referendum 67 with a campaign of misinformation. So let me help set the record straight:

Auto and homeowner insurance premiums will not go up because of Referendum 67. The fact is that if insurance companies treat their own policyholders the way they are required to be treated by law, insurance rates won't change. The only insurance companies with something to fear are those who make a practice of acting in bad faith with their own customers.
Health insurance premiums will not go up because of Referendum 67. The fact is that health insurance plans are specifically excluded from being covered.
Insurers will not be deluged by frivolous claims because of Referendum 67. Referendum 67 simply requires insurance companies to pay legitimate claims in a timely fashion and makes it illegal if they don't. Insurance companies playing by the rules will not have any additional requirements under Referendum 67.
In fact, insurance companies who treat their customers fairly will actually have an advantage in the marketplace because competitors that don't treat policyholders fairly will be subject to court-approved penalties. What's more, all penalties assessed against an insurance company charged with unfair practices must be court-approved under Referendum 67.

Here's the bottom line: Referendum 67 simply will make sure that insurance companies treat Washington consumers fairly. Is that really too much to ask?

I hope you'll join me in supporting Referendum 67 -- invite your friends and family to sign the Approve 67 online petition now!

The insurance industry is spending millions of dollars to defeat this common sense initiative -- but with your support, we can spread the word and Approve 67 this November.

Thanks for your help!

Mike Kreidler
Washington State Insurance Commissioner

P.S. Please forward this email to every Washington voter you know so we can get set the record straight about Referendum 67. It's easy to do -- and it will make a big difference when people start voting by mail in just a few weeks.

Invite your friends & family to sign the Approve 67 petition now!

Washington State: Approve R67

Still without a home, a year later - Insurance dispute stalls windstorm repairs


Not many reminders are left of December's windstorm that blew the Puget Sound region into the dark -- unless you happen to be driving down 39th Avenue Southwest in Arbor Heights.

The lights are on in all the homes that line the West Seattle street except for one: a lumpy, crumpled affair shrouded in ragged tarps and padlocked behind a chain-link fence.

The 140-foot poplar tree that landed on the roof of the little green house has been cut into chunks and hauled away, but the place is still in ruins -- more crumpled and broken than it was when owners Gerard Denommee and Kathi Cronin emerged from the basement with their children after the storm.

"This has been our home," Denommee said last week, staring at the soggy tarp-pile through the fence. "To see it still broken after all this time is so frustrating."

He blames an unfair insurance process for delaying the repairs the house needs. The house remains unrepaired and uninhabitable -- and might just be a talking point in a statewide debate over Referendum 67, which would force insurance companies to face huge jury awards if they denied or delayed claims.

Though Farmers Insurance has paid more than $100,000 for repairs and living assistance for the family so far, a disagreement persists over how much work needs to be done and how much it should cost. Denommee said he thinks the roof needs to be replaced entirely, but said insurance agency officials are telling him it can be repaired.

Frustrated with the process, the couple hired their own adjustor, but Farmers spokesman Jerry Davies said that makes the process slower. He said the company is trying to settle the claim quickly for Denommee and Cronin, and "the last thing we want to do is lose them -- I promise you that."

Denommee, however, said it has been difficult to get any kind of response from the company, and he suspects that Farmers is just trying to run out the clock.

"I can't get over the unfairness of it." Denommee said. "The system is not set up for the homeowners; it's set up for the insurance company. It's not a level playing field."

And so as the region gears up for the winter storm season, Denommee and Cronin are paying the mortgage on their damaged home while renting another.

And they're finding themselves a bit wind-shy.

During last week's windy days, Cronin was shaking uncontrollably while driving to pick her daughter up from school.

"It was eerie," she said. "I knew it wasn't like last year, but ..."

One look inside Cronin's home of five years will generate at least some sympathy for her nerves. The roof remains caved inward, and from the living room you can see rain clouds overhead when the wind tugs at the tarps.

Toy-chest-size bins collect the rainwater that drips from the bare beams, but they don't seem to be catching much. The hardwood floors are wet and muddy, and a contractor has stripped away the wallboard walls to expose the house's worn skeleton. The roots of the now-removed tree have given birth to a network of fresh, young poplar shoots that -- like something out of a Stephen King novel -- are methodically surrounding the house.

He recently signed a petition on the "Approve 67" campaign Web site, thinking that the added threat of triple damages could make insurance companies hustle to serve their clients in the future.

But it may not be that clear.

A spokeswoman for the pro-67 campaign said this looks like a textbook case of an unjustly delayed claim. But those pushing for the referendum's failure said Denommee and Cronin already have all the protections they need. If the couple have been mistreated, they can already claim the usual damages in court, plus damages related to emotional distress, "Reject 67" spokeswoman Dana Childers said.

Within 90 days, December's windstorm resulted in about 42,500 claims and $170 million in payments, according to data compiled by the Northwest Insurance Council. The state Insurance Commissioner's Office is investigating a total of seven complaints related to windstorm claims, according to the council's data.

For Denommee and Cronin -- who filed one of those seven complaints -- there's one room inside their Arbor Heights home they say is especially heartbreaking to visit: a back bedroom painted with murals of trees and flowers.

It's their 7-year-old daughter Briere's room, which she and Denommee painted with the help of 3-year-old Phin.

"But there is no grief in this," Denommee said. "My kids and my wife are OK.

"We can still laugh and say that we're going to be OK."

P-I reporter Amy Rolph can be reached at 206-448-8223 or

Tuesday, October 16, 2007

Big insurers dig deep to fight R-67

Measure strengthens policyholders with unpaid claims

OLYMPIA -- Four large insurance groups that do business in Washington have contributed more than 60 percent of the $9.6 million aimed at repealing a new law making it easier for people to fight the denial of claims.

Those groups, which have the biggest slice of the state's insurance market, also generated the most customer complaints with the state Office of the Insurance Commissioner -- 1,096 last year.

Sen. Brian Weinstein, D-Mercer Island, the insurance legislation's prime sponsor, said the correlation between contributions and complaints isn't surprising.

"The (complaints) brought against them are just the tip of the iceberg," Weinstein said. "It seems to me $6 million is a fantastic investment if they can stop this from becoming law and continue to delay and deny claims."

The millions the insurance companies have invested in trying to defeat Referendum 67 in November is a pittance compared with what they have at stake if voters approve the measure and validate the new law, which would allow policyholders to sue for triple damages when a company denies a legitimate claim. A no vote on R-67 would repeal the new law; a yes vote would affirm it.

Farmers (Zurich), Allstate, State Farm and Safeco insurance groups took in more than $3 billion in premiums from Washington policyholders last year, and they hold the largest portions of the state auto and homeowners insurance market.

Weinstein said preventing legal action on just one major claim from occurring in the context of the new Fair Conduct Act could offset the company's investment in the campaign.

"The consequences are that consumers will continue to be ripped off by their insurance companies who can do so with impunity," he said.

Washington is one of five states that do not allow punitive damages.

Weinstein, a former trial lawyer, said the new law provides an incentive for companies to act in good faith with their customers.

"It's important to have some type of incentive to keep an insurance company or a corporation from acting badly, because if you don't have punitive damages and you just say they have to compensate a plaintiff for the exact loss, they could write that into their business plan as a cost of doing business," he said. "They have no incentive to do the right thing."

The four large groups and the other insurance companies that oppose the referendum and the new legislation that it would codify into law say the increased litigation and costs would simply be passed on to consumers.

The Reject R-67 campaign cites an industry study that says the costs associated with the Fair Conduct Act would be passed on in the form of $650 million in rate increases.

The Property Casualty Insurance Association, a national group that represents the industry, says insurers are already required by law to act in good faith in the interest of their policyholders, and severe penalties already exist for those who do not.

The groups said Washington's new legislation is part of a national push by trial lawyers to encourage more lawsuits "and raise insurance rates for consumers and business."

Seven other states -- Connecticut, Maine, Maryland, Minnesota, Montana, Oregon and Vermont -- have worked to expand the ability to sue insurance companies, according to the association.

"The trial bar is supporting bills across the country that would make it easier to bring suits, recover damages and collect more attorney's fees," the association Web site says.

Supporters of the Fair Conduct Act, mainly the Washington State Trial Lawyers Association, have contributed $1.8 million to the Approve 67 effort.

The Insurance Commissioner's Office evaluated all the companies doing business in Washington with an index based on the number of complaints filed against each company compared to its market share.

In the index, which rates companies with a complaint-to-market-share ratio above 1 as "higher than average," Farmers Insurance Co. of Washington and Safeco Insurance Co. of America were rated slightly higher than average on the complaint index for auto insurance. The other main companies of the groups ranked below the average.

Both sides in the R-67 battle have deep pockets -- but the industry appears to be reaching deeper. According to at least one top company, the profits have been robust.

State Farm's chief financial officer, Michael Tipsord, said in a interview for the company's magazine that performance has been stellar.

"At a very high level, 2006 was a positive year from a financial performance standpoint. We saw an increase of almost $8 billion in our combined net worth for all State Farm affiliate companies (Group Net Worth) -- moving the State Farm enterprise to $58.1 billion in overall net worth," Tipsord said.

On Friday, the Approve 67 campaign criticized the industry's money-saving methods.

On the campaign's behalf, Robert Dietz of Arlington, a Farmers Insurance employee for 14 years, said insurance companies implemented computer programs designed to consistently lowball claims to increase company profits. Employees' performance was measured based on their use of this software and incentive programs, such as Farmers' "Quest for Gold," which financially rewarded claims adjustors for generating profits, according to insurance company memos.



More than 60 percent of the money is from four large out-of-state insurance groups.


Amount given by backers of the Fair Conduct Act -- mainly the Washington State Trial Lawyers Association -- to the Approve 67 campaign.

P-I reporter Chris McGann can be reached at 360-943-3990 or

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Wednesday, October 03, 2007

Washington State: Approve Referendum 67!

Thousands of consumers in Washington file complaints with the Office of the Insurance Commissioner against insurance companies every year because legitimate claims have been unfairly denied or delayed. Under our current law, there is no penalty for insurance companies that do not deal honestly with consumers. Unfortunately, some bad companies abuse the system by intentionally delaying or denying payment of legitimate claims.

If an insurance company unfairly denies a legitimate claim, your only recourse is to sue. But if you win, the only thing they have to pay is the amount of the original claim. Referendum 67 creates an incentive to treat legitimate claims fairly by allowing the court to assess penalties if an insurance company illegally denies or delays payment of a legitimate claim.
Referendum 67 would help to ensure that the insurance industry honor their commitments to treat all policyholders honestly by making it against the law to unreasonably delay or deny legitimate claims.

Referendum 67 covers claims related to homeowner’s insurance, auto insurance, long-term care insurance, property insurance and small business insurance.

Vote to Approve Referendum 67!!
For details see Approve 67

Informational YouTube Videos regarding R-67