INDIANAPOLIS (Feb. 15, 2005)––A plan by West Virginia Gov. Joseph Manchin to introduce legislation as early as next week to help reform the state’s civil justice system and address certain insurance-related issues is long overdue, an official of the National Association of Mutual Insurance Companies (NAMIC) said today.
NAMIC State Affairs Manager David Reddick said his organization is buoyed by Gov. Manchin’s recent actions such as calling a special session to enact legislation to eventually privatize the state’s workers’ compensation program.
“We hope the momentum for change demonstrated by lawmakers during the special session that ended two weeks ago will carry over into the current regular 60-day legislative session and result in much needed legal and insurance reforms,” said Reddick.
In the past year, Reddick noted, both the U.S. Chamber of Commerce and the American Tort Reform Association have labeled West Virginia as one of the worst legal environments in the country.
“If West Virginia hopes to avoid any last place designation in these surveys this year, lawmakers will need to change the joint and several liability statute, the collateral source rule, and end third-party bad faith lawsuits,” Reddick said.
Two weeks ago, the West Virginia Insurance Commission, in response to legislation enacted last year, released a 48-page report calling for the elimination of private third party cause of action lawsuits brought under the Unfair Trade Practices Act (UTPA).
“The Commission’s report concluded that the third party rights afforded West Virginians went beyond the original intent of the UTPA, causing insurers to adopt defensive claims settlement practices and have much higher than average expenses defending themselves in court,” Reddick said.
He added that the report also showed that West Virginia has 25 percent higher bodily injury claim costs when compared to non-third party states, and these private causes of action cost $166.7 million per year.
“In his State of the State Address on Wednesday, Gov. Manchin said he wanted to reopen the state for business,” Reddick said. “We commend him on wanting to change the business climate in the state, but must caution the Governor that in trying to achieve these goals, he needs to make sure lawmakers do not enact laws that represent a step backwards for insurers. The state needs more insurers to conduct business in West Virginia and make it more competitive, but if regressive laws are enacted, they simply will drive existing companies from the marketplace.”
Posted: Tuesday, February 15, 2005 12:00:00 AM. Modified: Tuesday, July 24, 2012 2:01:18 PM.
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