Insurance Litigation Lawyer & Attorney : National Insurance Law Forum : Insurance Coverage, Bad Faith Litigation

The U.S. District Court for the Western District of Washington has held, in response to a Motion to Amend, that the newly passed Insurance Fair Conduct Act is to be applied prospectively rather than retroactively from its effective date. Recognizing that whether a law applies retroactively is a question of legislative intent, the court found that the Washington Legislature did not express an intent for the IFCA to apply retroactively and further, that the statute was couched in present and future tenses. Additionally, the court determined that the IFCA is not remedial as it concerns more than “procedure or forms of remedies” as it creates a new cause of action for a claimant “who is unreasonably denied a claim for coverage or payment of benefits.” The case, HSS Enterprises, LLC v. AMCO Insurance Co. (Case No. C06-1485-JPD), is currently pending before the U.S. District Court for the Western District of Washington at Seattle.

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The Seattle Times is reporting this morning that Referendum 67 was approved by voters by a margin of 57% to 43% in Tuesday’s election. As we have previously reported, the Referendum allows the unprecedented remedy of uncapped treble damages awarded at the discretion of the trial court for “unreasonable” denials of claims for coverage or payment of benefits, or violations of the Washington Administrative Code regulations concerning improper claims handling. The National Association of Mutual Insurance Companies issued a statement this morning indicating that passage of the Referendum will likely lead to increased rates for Washington consumers and that the organization will work with lawmakers to repeal the IFCA during the next legislative session.

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As we previously reported, Washington State voters will decide the fate of the Insurance Fair Conduct Act (IFCA) on Election Day when Referendum 67 appears on the ballot. If passed by voters, the IFCA will allow for un-capped treble damages awarded at the discretion of the trial court, mandatory awards of reasonable attorney’s fees, actual litigation costs and statutory costs for violations. The AP has reported that nearly $14.5 million has been spent by trial lawyers and insurance companies battling over Referendum 67, making it one of the most expensive ballot-measure contests in state history. Stay tuned for our updates on Referendum 67 as Election Day approaches.

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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.

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