The National Association of Independent Insurers (NAII) filed an amicus brief this week with the Illinois Supreme Court to dispute an attempt by the Illinois trial bar to regulate the insurance industry in the courtroom.
“The National Association of Independent Insurers is asking the court to review a recent class action lawsuit that is contrary to the public policy of the state, encompassing the enforcement of appraisal provisions contained in automobile insurance policies,” Robert Hurns, NAII counsel, said.
Despite established statutes and legal decisions upholding the validity of appraisal clauses in insurance claims along with the arbitration process, the cases of Travis v. American Manufacturers Mutual Insurance Company and Hanke v. American International South Insurance Company contravene public policy favoring arbitration and appraisal.
“The lower court decision in each of these cases declares that the insurance appraisal process is not required in situations where the policyholder asserts both an insurance claim for breach of contract and for fraud in violation of the Consumer Fraud Act. The fact that there may be other issues as to fraud and statutory claims should not eliminate the necessity of determining the amount of the loss for the breach of contract claim,” Hurns remarked.
“Moreover, the Fifth District opinion in each of these cases is contrary to another decision by the Appellate Court in which the appraisal clause was enforced. This case involved claims for fraud as well as breach of contract.
“The NAII believes the Illinois Supreme Court recognizes the need for class action reform in the state and will begin taking a closer look at class action lawsuits filed in the future. The subject matter of this lawsuit should be addressed by the Insurance Commissioner, not by the trial bar. The trial bar is attempting to regulate insurance, and that authority properly falls to the Illinois Department of Insurance, ” Hurns added.
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