Washblog

September 7, 2007

Dear Noemie:

As a long-time independent insurance agent in Renton, I want to tell you about some serious concerns I have about Referendum 67, which will appear on this fall's ballot.

Quite simply, R-67 wil increase insurance rates not only for my customers, but for every person and business that purchases insurance in Washington.

Trial lawyers are backing this proposed law because under R-67, they could use the threat of triple damages to force your insurance company to pay more than its fair share for insurance claims.  R-67 allows personal injury lawyers to threaten your insurance company with exorbitant lawsuits if they don't settle.   It also would virtually guaranatee that trial lawyers get their fees paid by the insurance company.  We may as well rename R-67 the "Lawsuit Promotion Act of 2007".

And the proof is in the pudding.  California suffered for years under a law like R-67.  It flooded their courts with lawsuits, and insurance rates skyrocketed.  Their Supreme Court finally said "enough" and prohibited these lawsuits.   When trial lawyers got a new law passed to make these types of lawsuits legal again, voters overturned the law.

Washington doesn't need to gamble with a failed California idea that has already proven to be disastrous for consumers.

If bigger insurance bills and excessive lawsuits were't enough,  R-67 will also increase health care costs for Washingtonians.  This proposed law  applies to the medical malpractice insurance doctors must buy, so health care bills will become more expensive as physicians' costs rise.

Because I work every day to make sure insurance companies treat my customers fairly, I know Washington's consumer protection laws already safeguard us.  Customers can already sue insurance companies if they feel they were treated unfairly, and the state can terminate an insurance company's license to do business if they mistreat consumers.  R-67 is unnecessary and will only increase your insurance rates and encourage frivolous lawsuits.

If passed, this referendum  will hand trial lawyers the lawsuit jackpot by giving them the ability to sue for three times what's owed.  It's wrong for regular Washingtonians to subsidize the bottom lines of some big personal injury law firms.

Please join me in rejecting R-67.  Don't let aggressive trial lawyers raise rates for the rest of us.

Ray Peretti - Independent Insurance Agent.

MYTH V FACT ON RAY PERETTI

Myth - This was a letter written, mailed, and paid for by a local insurance agent.

Fact - Ray Peretti is not your typical neighborhood insurance agent. Basic research reveals he has a long history as insurance industry lobbyist, advocating against the rights of consumers. He has been a strong advocate for expansive and unfettered use of personal information and credit scores to set higher rates for consumers, which hits particularly hard on people of lower incomes. Google him to see for yourself.

Peretti did not pay for or mail this letter. The organization paying for the mailing, "Consumers Against Higher Insurance Rates" is actually a front group entirely funded by the insurance industry. If you look at the state's Public Disclosure Commission website www.pdc.wa.gov, this phony consumer group has received nearly $8 million from large, out-of-state insurance companies. The insurance industry is  shattering spending records for our state to try and defeat Referendum 67, which simply requires the insurance industry treat people fairly and reasonably.

Myth -"A similar law in California created a flood of lawsuits and was later overturned by the people of California."

Fact - The comparison to California is completely irrelevant and deliberately deceptive, and the insurance industry knows it. The discussion about California law is from a 1980's law that only applied to what is called third party insurance claims - that is, claims against some one else's insurance company. R67 applies only to claims involving your own personal insurance that you have paid for. Consumer insurance experts in California have stated that this is not just like comparing apples to oranges- its like comparing fruit to appliances. They are totally unrelated.

The same insurance industry lobbyists and executives who are paying for this campaign know that this is deceptive. They were forced to admit in front of Washington's Legislature that this bill has nothing to do with the California experience and were directed by committee chairs in the House and Senate to abandon this argument because it is patently false.  (1)  Once more, the California law actually stabilized premiums three years before the law in question was overturned. Check out what California consumer groups have to say at Consumer Watchdog. (2)

Myth - "Insurance Premiums will go up if R67 passes."

Fact - Referendum 67 will not affect Washington insurance premiums. State regulations administered by the Office of the Insurance Commissioner do not allow the use of payments for bad faith claims to be used by insurers in setting rates. Any additional court ordered penalties go to the insurer, and cannot be passed onto consumers. Furthermore, R67 gives every insurer 20 days to receive all the facts and information and then have an opportunity to settle a claim before any lawsuit can be filed.    

Myth - "Insurers will be deluged by frivolous claims and this will create a bonanza for trial lawyers."  

Fact - R67 simply requires insurance companies to pay legitimate claims in a timely fashion and makes it illegal if they don't. Insurance companies following the rules will not have to fear this new law. In fact, insurance companies who are treating their customers fairly will have an edge in the marketplace because the companies that don't treat policy holders fairly will be subject to court approved penalties.

All penalties assessed against an insurance company charged with unfair practices must be court approved under R67.