ARTICLE: R-67 mailing 'felt like a threat'

SEATTLE POST-INTELLIGENCER
October 24, 2007
By CHRIS MCGANN
P-I REPORTER

OLYMPIA -- Some customers of one of the state's largest insurance companies are concerned about letters warning that they could see higher rates should a controversial referendum pass in November.

Some policyholders with State Farm said it felt more like a threat than voter information.

The letter reiterates what opponents of the referendum have been telling voters, too.

Referendum 67 asks voters to approve new legislation that allows triple damages in lawsuits where insurance companies deny or delay legitimate claims. If the measure is approved, the legislation would become law.

A variety of insurance companies have invested nearly $10 million in the campaign to kill the measure and the Insurance Fair Conduct Act, which R-67 would enact.

"Referendum 67 could cost your family as much as $205 a year in higher premiums. The statewide impact is estimated at $650 million annually, according to research firm, Milliman, Inc. of Milwaukee, Wisconsin," the State Farm letter reads.

"What benefit will the public realize from its annual $650 million 'investment?' More teachers? Better roads? Improved public safety?

"No. What we can expect are more frivolous lawsuits clogging our court system and increasing our insurance costs," the letter states.

Referendum supporters say that the industry is overstating the impact and that companies that act in good faith have nothing to fear.

A State Farm policyholder, who asked not to be identified out of fear of retaliation, sent the Seattle P-I a copy of the letter and said it angered him.

"It felt like a threat," he said. "And because of that letter, I'm going to vote for the referendum."

State Farm spokeswoman Nancy Carpenter said the letter was simply an effort to inform voters, who also happen to be insurance policyholders.

Carpenter said copies of the letter were provided to about 300 State Farm agents in Washington, who could send them to their customers at their own discretion.

"State Farm is a member of the coalition of Consumers Against Higher Insurance Rates" -- the Reject R-67 campaign -- "and we felt it was important to let the customers know why we feel Referendum 67 should not become law," she said.

Reject 67 spokeswoman Dana Childers said lawyers who have represented people against insurance companies are also sending out letters, urging clients to approve the measure.

Sue Evans, who speaks on behalf of the Approve 67 campaign, said proponents had been aware of the letter. She said it represented the same "fear mongering" that was "the whole basis for the campaign."

"If you follow the full circle, it's sort of like this: 'We want you to buy the policy even though we are not going to honor the terms of the policy and if you make us go to court to pay on the policy, we are going to pass those costs back on to you in the form of rates. So you can never win," Evans said.

Davis Law Group
2101 Fourth Avenue
Suite 630
Seattle, WA 98121

Toll Free: (800) 883-0265
Phone: (206) 727-4000