Oklahoma's Property Insurance Legislation: A Closer Look at SB 726

Oklahoma lawmakers are scrutinizing property insurance interests in recent legislative activities, as revealed by Oklahoma Watch. Central to this review is SB 726, sponsored by Rep. Mark Tedford and Aaron Reinhardt. This bill sought to eliminate the 15% annual interest on court verdicts favoring insured individuals with uninsured motorist coverage but failed to pass. Rep. Tedford, CEO of Tedford Insurance, and Reinhardt, VP of Risk Management at Bancfirst Insurance Services, have sponsored previous bills impacting the insurance industry. Significant legislation includes prohibiting policyholders from assigning benefits to auto body shops. Another measure, co-sponsored with Sen. Lonnie Paxton, an Oklahoma Farm Bureau agent, caps storage fees for total loss vehicles, effective November 1. These legislative efforts have sparked opposition from the Oklahoma Auto Body Association and several repair shops, leading to lawsuits challenging the bills’ constitutionality. Peyton Bell, a plaintiff and owner of Bell Auto Body, noted that the state's Attorney General has filed a motion to dismiss these cases, scheduled for a hearing next month. The proposed removal of the 15% penalty, a tool enforcing timely claims responses, emerged as a contentious issue. During a May hearing, Rep. Emily Gise raised concerns about the impact on constituents affected by natural disasters like tornadoes and fires. A lawsuit against the Oklahoma Insurance Department further complicates the debate, accusing State Farm of regulatory non-compliance. Tedford admitted State Farm's influence in suggesting the legislative change, prompting some lawmakers to worry about favoritism towards a specific carrier. Post-hearing, the Oklahoma Attorney General intervened in a case against State Farm involving alleged bad faith practices, defending numerous policyholders. Defending their legislative efforts as tort reform initiatives, Tedford and Reinhardt emphasized reducing insurance premiums, paralleling reforms in Florida. Tedford stated that ongoing measures aim to enhance consumer protection, manage rising homeowners insurance costs, and improve regulatory compliance. He highlighted the significance of legislative actions to boost property resiliency and close administrative gaps, ensuring fair policyholder treatment. Upcoming legislative actions aim to streamline claims processes, quicken complaint responses, and potentially eliminate attorney fee awards in litigation. These steps intend to reduce frivolous lawsuits, litigation costs, and stabilize the insurance market. Nonetheless, contrasting views exist regarding the effectiveness of similar reforms in states like Florida, where increased litigation and claim denials have ensued.