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Understanding New Claims Handling Rules in Washington
During a recent virtual meeting hosted by the Washington Office of the Insurance Commissioner (OIC), discussions were heated regarding proposed changes to claims handling rules. Insurers expressed concerns that these changes could inhibit their willingness to operate in Washington, while consumer advocates argued that these adjustments are essential to protect policyholders.
The Rationale Behind the Changes
The OIC's proposal stems from a noticeable increase in consumer complaints and lawsuits against insurers in recent years. The agency aims to ensure a transparent claims process, allowing consumers to have fair access to their entitlements. The proposed changes would redefine how claims notifications are communicated, now including notifications from third-party claimants.
Potential Impact on Insurance Companies
Critics of the proposed rules, such as Justin Lewis, president of the Washington Independent Collision Repair Association, warned that the tightening of response times could worsen situations for consumers rather than improve them. Insurers would be required to acknowledge claims more quickly, reducing their response window from 10 to 5 days for individual claims, while also needing to respond to cost estimates, supplements, and final bills in just three days. This leaves little room for comprehensive evaluations of claims.
Balancing Consumer Rights and Industry Viability
On the other end, Ryan Hesselgesser, a shareholder with Forsberg & Umlauf, expressed his doubts that such stringent rules can coexist with a healthy insurance market. His fear is that these requirements might push insurers out of Washington altogether, ultimately harming consumers by limiting their options.
What’s Next?
The OIC will review comments submitted by interested parties before making a final decision on the proposal. Stakeholders from both side will have to clearly articulate their positions if they hope to influence the upcoming ruleset. As the August 8 deadline approaches, it will be vital for those affected to voice their thoughts effectively.
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