Insurers working to repeal consumer protection act passed in 2007 session

Representative Steve Kirby, as a concerned citizen, is sounding the alarm about Referendum 67 in a message dispatched from his own private email:

Citizens should beware that signature gatherers for a new referendum are working to overturn a new consumer protection law approved by the Washington state Legislature and signed by Gov. Christine Gregoire, according to State Rep. Steve Kirby (D-Tacoma).

The Insurance Fair Conduct Act (ESSB 5726) gives consumers new safeguards against insurance companies that unreasonably deny legitimate insurance claims. Kirby chairs the House Insurance, Financial Services and Consumer Protection Committee and sponsored a similar version of the bill in the House.

"The law we passed simply says the insurance industry must treat consumers fairly. If you paid your premium and file a legitimate claim, the insurance company must honor its commitment," Kirby said.

A coalition of primarily out-of-state insurance companies led by the American Insurance Association filed a referendum petition to overturn the Act the day after Gregoire signed it into law. The proposed referendum (Referendum 67) would ask voters to approve the law again.

An estimated 4,100 Washington consumers fight complaints against insurance companies every year to recover costs related to valid insurance claims, according to the Washington State Office of the Insurance Commissioner. Insurance companies routinely deny and delay payment of claims, forcing consumers to take their grievances to court where battles can last more than five years, lawmakers and consumer advocates say.

"In your darkest hour, when life hands you a devastating blow, you expect your insurance company to be there when you need it the most," Kirby said. "This law protects the people who don't have the resources or the remedy to stop insurance company abuse. That's most of us."

The insurance industry will need to collect a total of 112,440 to place Referendum 67 on the November ballot. Approval would ratify the law. Rejection would erase the consumer protections it created.

Legislators locally and nationally say the insurance industry is engaged in a nation-wide campaign to deprive consumers of their rights to hold bad insurance companies accountable under the law.

Court actions against the campaign include several class action lawsuits filed on behalf of Hurricane Katrina victims. One prominent plaintiff is former Republican majority leader U.S. Sen. Trent Lott, R-Mississippi, who lost his house in the 2005 disaster.

"The insurance industry makes money when they deny legitimate claims because they take that money to the bank where it sits and earns interest," Kirby said. "We've all heard stories from our family and friends when insurance companies increase your rates or drop you when you file a small claim. This law protects people they drop-kick out the door."

The industry is astroturfing, operating under the banner of a political action committee called "Consumers Against Higher Insurance Rates".

[Astroturfing, for the uninformed, is a term for formal campaigns in politics and advertising that seek to create the impression of being spontaneous, grassroots behavior. Hence the reference to AstroTurf (artificial grass) is a metaphor to indicate fake grassroots support.]

If you observe signature gathering activity for Referendum 67, please report it immediately to Permanent Defense so we can track this signature drive and respond (exercising our First Amendment rights) as opportunities arise.