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Virginia Insurance Companies
Date: Mar 18, 2005
Contributor: Sofia Izatt
E-mails show insurance rate negotiations
Several insurance companies have promised specific rate rollbacks in West Virginia, but only if certain tort reform bills are passed without significant changes, according to documents from the state Insurance Commission.
The letters and e-mails show how Insurance Commissioner Jane Cline conducted negotiations with the state’s largest insurance companies about what they would do if the state passed certain laws.
The documents were released to the Gazette Thursday in response to a request under the Freedom of Information Act. The specific amounts of the rollbacks were blacked out because of an exemption in the state sunshine law for trade secrets, said Carte Goodwin, Gov. Joe Manchin’s general counsel.
On Feb. 23, Cline e-mailed Manchin administration official Brian Kastick about an increase in the offer from Nationwide Insurance.
“I have heard from Nationwide and they will up the auto premium reduction by [blacked out] the first year and [blacked out] the second year,” Cline wrote. “Their offer as with State Farms is based upon the Senate President’s third party bad faith bill. A partial fix will not do it.”
The e-mails between Cline and Kastick represent the only known written records of the agreements between insurance companies and the Manchin administration to reduce rates, Goodwin wrote in his reply to the FOIA request.
Also Thursday, three amendments to Manchin’s insurance bills, one that would have preserved third party lawsuits, were defeated in the Senate Judiciary Committee.
The committee room was packed with insurance lobbyists, trial lawyers and Capitol observers expecting possible changes to the bill from Senate Judiciary Chairman Jeffrey Kessler, D-Marshall, a lawyer.
The normally reserved chairman became animated when he complained about the $50 million in savings promised by the insurance industry if the Manchin bill passes. Lawmakers might as well rename the Capitol’s buildings after insurance companies, he said — the “Nationwide East Wing” and “Allstate West Wing.”
“We’re selling our rights to a bunch of nameless, faceless folks walking around with bags of money,” Kessler said. “I’m opposed to selling our rights at any price.”
December meeting
In December, several insurance industry representatives met with the Manchin administration to ask for at least seven changes in current law, according to a letter by Westfield Insurance President Roger McManus. Those changes include:
Elimination of third-party bad-faith lawsuits Making it easier to drop homeowners insurance policyholders Elimination of joint and several liability “When these reforms are passed, essentially as drafted, and signed by the Governor,” McManus wrote, “the insurance market will make insurance available and affordable to West Virginians.”
