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New Law in Oregon Means Policyholders Should Now Report Bad Behavior to Insurance Commissioner



This week, Oregon's governor signed into law SB 1591A, which permits the Insurance Commissioner (part of the Department of Consumer and Business Services, or DCBS) to release complaints made to DCBS about insurance company claims handling practices, upon request.

This is a long-overdue fix to a bizarre anomaly in Oregon law: previously, the law (ORS 731.264) specifically prohibited DCBS from releasing complaints, even under Oregon FOIA. At the same time, Oregon's Unfair Claims Settlement Practices Act (ORS 746.230)  (the "Act") provided that an insurer could be deemed to have a "general business practice" that is in violation of the Act based (among other things) on "a substantial increase in the number of complaints against the insurer received by the Department of Consumer and Business Services."

But without the ability to obtain complaints against insurers, no-one could hold DCBS accountable for failing to enforce the Act. (Oregon's courts have held that the Act does not permit a private right of action, see Employer's Insurance v. Love It Ice Cream, 64 Or App 784, 670 P2d 160 (1983)). This stood in dramatic contrast to Washington law, under which complaints (including specifically 20-day-notice letters under IFCA) were easily obtainable via FOIA. And DCBS, despite a regulatory mandate to publish general information in an annual report about the complaints, appeared not to be keeping track of commercial-lines complaints, only reporting on personal-lines statistics.

Now, DCBS will be required to release "information about complaints" for unlawful practices under ORS 746.230 on request. The statute kicks in on January 1, 2017 but will sunset in 2021, unless re-authorized. Obviously insurance companies would prefer that complaints about their practices not be made public, and so lobbied against the bill and for the sunset provision.

DCBS has made some progress in publicizing its complaint-resolution process for personal-lines insurance through its "Answers & Action" PR blitz. Now it is up to commercial lines policyholders and their advocates to submit complaints to DCBS and to insist that they be properly investigated and the law enforced. A link to the DCBS complaint website is here.

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