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Ohio wants nothing to do with New Mexico life insurance lawsuit

An attempt by Ohio insurance regulators to intervene in a lawsuit that they say would impose another state's laws and increased costs on Ohio consumers was denied.

"The consumer doesn't stand

to make a lot

of money in

these class

action lawsuits."

Ohio Insurance Director Lee Covington 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 (DOI) to regulate insurers.

Covington's motion was denied on Feb. 22, 2002, three days after it was filed.

"I am fundamentally against allowing a court in New Mexico, or any other state, to make policy that will affect Ohio insurers and insurance consumers," says Covington.

According to Floyd Wilson, an attorney for the plaintiff in Enfield vs. Old Line, 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, says Wilson.

"If an insurer uses a standard policy form throughout the United States, the words should mean the same thing," says Wilson. "It doesn't make sense to say that it means one thing in Ohio and another thing in Indiana."

Ohio regulators did not take a position on the subject disputed in the lawsuit — whether policyholders who pay premiums monthly are discriminated against by being charged additional fees. In his failed attempt to intervene in the case, Covington had also requested that Ohio consumers be opted out of the class. That request was likewise denied.

The attempted intervention by the DOI followed some successes in protecting Ohio consumers by intervening in class action lawsuits over the "stacking" of uninsured motorist auto insurance, says DOI spokesperson John Charlton.

"The consumer doesn't stand to make a lot of money in these class action lawsuits," says Charlton. "They are more beneficial to trial attorneys."

The intervention attempt was prompted by the potential for high legal fees from the settlement of class action lawsuits that don't provide much benefit to consumers, and which often cause insurers to pass the costs on to consumers through higher premiums, says Charlton.

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