Oklahoma Proposes Homeowners Insurance Reforms to Enhance Consumer Protections
The Oklahoma Insurance Department recently unveiled legislative proposals aimed at reforming the homeowners insurance sector. Key initiatives include expanding the fortified roof program and mandating coverage for roofs that are not excessively worn. These measures aim to mitigate wind and hail damage impacts, common in Oklahoma. Additionally, the proposals seek to shorten the time insurers take to acknowledge and decide on claims and introduce a homeowners bill of rights.
A notable proposal could complicate legal actions against insurance companies, with the department suggesting litigation costs raise insurance rates. Rep. Mark Tedford and Sen. Aaron Reinhardt have voiced concerns, favoring third-party adjusters over litigation for dispute resolution. Tedford remarked, "I really don’t like litigation in a property claim," noting potential increased costs and prolonged disputes.
Despite these efforts, the proposals face criticism from some policyholders and industry experts. Tulsa Police Lt. Billy Hursh, involved in litigation over a denied roof damage claim, expressed concerns about potential barriers for consumers seeking legal redress. Similarly, Robert Hunter, former Texas Insurance Commissioner, questioned the sufficiency of these measures, advocating for stricter penalties on industry misconduct.
Industry and Regulatory Perspectives
Commissioner Glen Mulready emphasized collaboration with lawmakers and industry partners in forming these proposals. While specific penalties and litigation costs are not detailed, insurance entities have historically lobbied, spending an average of $130 million annually from 2014-2023. This highlights the industry's influence on regulatory compliance requirements.
The proposals have sparked a debate on balancing consumer protections with industry regulations. State officials like Senate Minority Leader Julia Kirt and Rep. Andy Fugate call for restored regulatory oversight on insurance rate adjustments and tighter profit controls on insurers. They criticize the legislative package for omitting affordability and demand reforms ensuring rates align with actuarial justifications.
Looking forward, the proposals will be further debated in the legislative session. Stakeholders, including consumer advocacy groups and insurance representatives, are expected to contribute. The Oklahoma Insurance Department remains open to insights from policyholders as legislative developments unfold, demonstrating a commitment to adaptive regulatory frameworks.