Oklahoma article questions insurance involvement on lawmaking in the state

Oklahoma legislators are questioning property insurance’s influence on lawmaking in the state, according to a recent article published by Oklahoma Watch, a nonprofit news site. 

The article specifically focuses on Rep. Mark Tedford (R-District 69) and Aaron Reinhardt’s (R-District 37) sponsorship of a failed bill, SB 726, last session. The bill would have removed 15% annual interest for court verdicts in favor of insureds if the insured had uninsured motorist coverage. 

Tedford is the owner and CEO of Tedford Insurance. Reinhardt is vice president of risk management at Bancfirst Insurance Services. The two also sponsored a bill that bans consumers from assigning benefits to auto body shops.

Another bill passed last year was sponsored by Tedford and Sen. Lonnie Paxton (R-District 23), an Oklahoma Farm Bureau agent, to cap storage fees for total loss vehicles. It became effective Nov. 1.

The Oklahoma Auto Body Association (OKABA) and 13 auto body shops have called the two passed bills unconstitutional in separate lawsuits filed in the state late last year. 

Peyton Bell, a plaintiff in the case, owns Bell Auto Body and was the verifying signer in the suit. He told Repairer Driven News on Tuesday that the Attorney General’s office has filed to dismiss the case. A hearing that could determine whether the case will move forward is set for next month. 

The Oklahoma Watch story focuses on the failed SB 726 bill. It says that during a May hearing on the bill, Rep. Emily Gise (R-District 90) questioned it.

“Can you please help explain to me why we are removing the 15% penalty that would enforce timeliness, as it’s our only existing mechanism for timeliness at this time?” the article says Gise asked. “How does that help our constituents, especially mine in Tornado Alley? Or Speaker Hilbert’s with the fire damage? Or my deskmate in Atoka who had the tornado damage?”

The article says Tedford responded with, “I don’t think we’re seeing a lot of claims out there where, within 60 days, the carrier has not responded at all.” 

However, the article points to a pending lawsuit against the Oklahoma Insurance Department that claims State Farm routinely ignores deadlines. 

When Gise asked who requested the bill, Tedford responded that it was State Farm. 

Oklahoma Watch questioned multiple lawmakers about their thoughts on the bill. 

“I am leery of voting for anything that benefits a specific entity,” Rep. Trish Ranson (D-District 34) told the media site. “That was a factor for me. When it was divulged, I was like, ‘I don’t know if I can vote for that.’”

Rep. Daniel Pae (R-District 62) told Oklahoma Watch that “despite a lack of discussion of SB 726, there was a palpable sense in the chamber that members didn’t want State Farm writing their laws.”

Since the hearing, Oklahoma Attorney General Gentner Drummond has intervened in a case that represents hundreds of policyholders suing State Farm for bad faith. 

Oklahoma Watch states that Reinhardt and Tedford say the bill was a part of a package of tort-related measures intended to lower premium costs, similar to Florida. 

Both Reinhardt and Tedford are quoted in a December press release from the Oklahoma Department of Insurance that’s focused on legislative reform to strengthen consumer protections and address rising homeowners insurance costs. 

“It has been a challenging few years for Oklahoma policyholders,” Tedford says in the release. “While we can’t control severe weather or the rising cost of building materials, strengthening property resiliency, pursuing tort reform, and closing administrative loopholes in current law are the right steps forward. I applaud the commissioner’s commitment to ensuring policyholders receive prompt and fair treatment before and after a claim. Combined with recent anti-fraud and tort-reform measures, I believe the Legislature has taken meaningful action to put sound prevention and mitigation mechanisms in place for the market.”

The release states that legislation that will shorten the response deadline for complaints, speed up claim acknowledgement and estimates and lead to quicker claim decisions. 

However, the release also speaks about removing attorney fee awards in court cases. It says this would help disincentivize frivolous lawsuits, reduce litigation costs, and further stabilize the market. 

“As the lawsuits increase the costs of claims, insurers then raise rates to transfer those costs to Oklahoma policyholders,” the release says. 

Florida Gov. Ron DeSantis has claimed that his insurance reform caused premium reductions by the state’s top five auto insurance groups. 

Oklahoma Watch notes that some suggest the effect might be an illusion and points to a Weiss Ratings article, “How Florida Tort Reform Has Backfired.” 

The article shows that lawsuits in Florida have gone up by 24% since the reform, and the number of denied claims rose 17%.