National class action lawsuits, which cost insurance companies millions of dollars, will eventually have an effect on consumers because insurance companies will pass those costs on in rate increases, says Ohio Insurance Director Lee Covington.
Insure.com Car Insurance - Official site. Compare auto insurance quotes, 200 companies, instant term life insurance quotes, life insurance quotes, health insurance quotes, medical insurance quotes, dental insurance, long-term care insurance, renter's insurance.
|
See the biggest insurance problems across the country
|
Recently
Covington unsuccessfully sought to block the nationwide class action
certification of Enfield vs. Old Line Life Insurance Co., which is
being tried in New Mexico, because it could "significantly undermine"
the ability of the Ohio Department of Insurance to regulate insurers.
Covington
says high legal fees from the settlement of class action lawsuits don't
provide much benefit to consumers, and they often cause insurers to
pass the costs on to consumers through higher premiums.
"A
local judge in another state doesn't know the issues facing consumers
in Ohio but may make a decision that affects those consumers directly,"
he says. Covington believes he has sole responsibility for determining
insurance policies in his state.
Attorneys
in the New Mexico class action suit said Covington's arguments against
the certification of the class didn't make sense. If Covington had
blocked the certification it could have led to standard insurance
policies being interpreted differently across the country. They argue
that class action lawsuits can benefit consumers because contract
language becomes universal and not subject to different interpretations
in different states.
|
