Oklahoma Insurance Department Plans Action After Failure of Towing Claim Bill

A bill aimed at prevented insurance companies from cancelling, non-renewing or increasing consumers’ insurance premiums for filing a towing or roadside assistance claim failed to advance in Oklahoma’s legislative session, so the state’s insurance commissioner plans take regulatory action.

After House Bill 3236, authored by Rep. Lewis Moore and Sen. Bill Brown, failed in the final minutes of the legislative session, Oklahoma Insurance Commissioner John D. Doak said he plans to take action to protect consumers from having their policies canceled by auto insurers.

“We are beginning to see a disturbing trend among insurance companies using towing claims to cancel or non-renew policyholders in Oklahoma,” Doak said in a media release. “Many consumers are unaware that this is taking place, which is why I will be focusing my efforts in the coming months on requiring more disclosure.”

Oklahoma General Counsel Gordon Amini told Insurance Journal that the department plans to conduct a market conduct exam and is in the process of writing a bulletin to auto insurance companies about the issue.

Amini said the department became aware of the problem through consumer complaints to the agency.

“We know that a significant piece of the market, maybe up to 25 or 30 percent of the total personal auto market, is involved,” he said.

The department had oral discussions with some companies about the problem. Later, after requesting information in written form, “we found out that our first impression based on the oral and verbal communication was not correct after all, indicating that the problem was more widespread than we first imagined,” Amini said.

The department first will reach out to insurers to get them voluntarily stop the practice.

If that is unsuccessful then regulators will look at non-voluntary action. “We’re going to essentially tell them that they can’t do that,” he said.

Amini said there are couple of sections in the law that back the insurance department’s stance.

“One is very clear cut,” and the other appears to indicate the practice is a violation as well, he said.

Rep. Moore, who chairs the House Insurance Committee, said in the department’s announcement that the Legislature missed a golden opportunity to protect consumers by not passing House Bill 3236.

The Oklahoma Insurance Department said it will address the issue from a regulatory perspective on both a state and national level.