Washington State Insurance Legislation Update
The Insurance Fair Conduct Act (IFCA) was passed by the Washington State Legislature in May 2007 after much legislative debate as to the need for the unprecedented remedy of un-capped treble damages awarded at the discretion of the trial court for a violation of the IFCA. Violations of the IFCA can result from (1) an unreasonable denial of a claim for coverage or payment of benefits or (2) violations of the Washington Administrative Code regulations concerning improper claims handling. In addition to the possibility of discretionary uncapped treble damages, mandatory awards of reasonable attorney’s fees, actual litigation costs and statutory costs for violations are required under the IFCA.
The IFCA became law on May 15, 2007 and was set to go into effect on July 22, 2007. However, a petition was filed on May 16, 2007 for a voter referendum to approve the Act, now referred to as Referendum 67. The IFCA is therefore essentially stayed until the November 2007 election. Should the IFCA survive the referendum, it is unknown whether it will be applied retroactively.
