Magazine article Risk Management

Grassroots Success in Ohio. (Rules & Regulations)

Magazine article Risk Management

Grassroots Success in Ohio. (Rules & Regulations)

Article excerpt

Risk managers, employers and insurers achieved a major victory this summer in Ohio with the passage of Senate Bill 97, the Uninsured/Underinsured Motorist Availability Act. The legislation was signed by Governor Bob Taft in July, and became effective October 31, eliminating the statutorily mandated offering of UM/UIM coverage in personal and commercial auto insurance policies. The story behind this law clearly illustrates that when people at the grassroots level unite for something they believe in, changes can be made.

The Ohio Supreme Court, better known in years past for its penchant for making law rather than interpreting it, surprised the political world and the insurance industry with its ruling in Scott-Pontzer v. Liberty Mutual Fire Insurance Co. (June 1999). The court established that the family of an employee in a serious or fatal auto accident could collect damages from the employer's insurance company under the company's UM/UIM auto policy even in situations where the employee was driving a personal vehicle on personal time.

When employers throughout the state, in reaction to the ruling and their rapidly rising insurance rates, began waiving UM/UIM auto coverage, the court handed down yet another controversial decision. In Linko v. Indemnity Insurance Co. of North America (December 2000), it stated that a company that had refused UM/UIM coverage could still be held liable because the current insurance forms did not expressly determine if the company's subsidiaries had also waived UM/UIM coverage.

Trial attorneys in the state used the opportunity to open old cases--some from as far back as fifteen years--to win claims for plaintiffs. Several lawyers began to advertise the changes in Ohio law, encouraging potential clients to seek damages from insurance companies for prior serious or fatal auto accidents that went unpaid because clients did not have UM/UIM coverage at the time or they were not driving their employers' vehicles and were not on company time when the accidents occurred.

Insurance companies were faced with staggering losses, estimated at $1.5 billion, forcing many to cancel or serve nonrenewal notices to their customers. It did not take long for Ohio state senator Scott Nein, with the help of insurance and business interests in the state, to introduce legislation to restore fair and reasonable UM/UIM auto coverage. …

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