Insurance Referendum Appears Headed for Wash. Ballot

July 24, 2007

In its latest attempt to block a Washington regulation that insurers say would drive up insurance rates, the insurance industry association has launched a public campaign to take their issue to the ballot box.

A campaign bankrolled by insurance companies said it turned in more than 155,000 petition signatures, which should be enough to earn Referendum 67 a spot on this fall’s ballot. The signature efforts came despite weeks of negotiations brokered by Gov. Chris Gregoire.

The referendum will ask voters to approve or reject a new state law that allows consumers to collect triple damages if insurance companies unreasonably deny a claim or violate unfair practice rules.

The law in question covers most forms of insurance regulated by the state, but doesn’t apply to health insurance, to state coverage such as worker’s compensation or unemployment, or to organizations that self-insure.

Insurers say it’s an unnecessary new regulation that would enrich trial lawyers while driving up insurance rates. The industry has given more than $1.8 million so far to the “no” campaign.

“Voters can — and should — reject this self-serving, trial lawyer-sponsored legislation,” Reject R-67 spokeswoman Dana Childers said.

Trial lawyers, however, say the threat of triple damages under the new law would keep insurance companies from unfairly rejecting legitimate claims.

The Washington State Trial Lawyers Association and various attorneys have donated more than $270,000 so far to the Approve 67 campaign.

“People buy insurance, pay their premiums on time, and all they ask in return is for the insurance industry to honor its commitment and deal with them honestly,” Approve 67 spokeswoman Sue Evans said.

Gregoire, who regularly tries to defuse touchy political fights, has been working with both sides since May on a compromise that would water down some of the insurance law’s language.

In fact, the Reject 67 campaign had its signed petitions ready for weeks, but waited to see if a deal could be reached before handing them over. The deadline to turn in referendum signatures is Saturday.

“Frankly, we just ran out of time,” said Marty Brown, Gregoire’s legislative director.

Kenton Brine, regional manager for the Property Casualty Insurers Association of America, said both sides agreed not to publicly rehash their negotiations. With the referendum deadline looming, the talks simply hadn’t made enough progress, he said.

“We felt we had to move forward with the referendum,” Brine said.

It could take up to three weeks for Secretary of State Sam Reed to certify whether there are enough valid voter signatures for R-67 to officially make the statewide ballot.

Referendum sponsors need about 112,000 signatures to get an audience with voters, and 155,000 should be enough to overcome the typical rate of rejected signatures.

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