Wintry mix spreads across Minnesota

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The proposal would hold an insurance company liable for damages and legal fees for failing to act in good faith to settle a policy holder's claim. But DFL leaders who were pushing for the bill were forced to do an about-face amid bipartisan concerns about the requirement.  

Senate Majority Leader Larry Pogemiller of Minneapolis said lawmakers reached an agreement with the governor to strip the insurance language from the bigger bill.  

"I think we've got a situation now where we can have a strong bipartisan vote in both houses on this particular bill," Pogemiller said. "And I think that would be good for the flow of the session."
 

The compromise followed a day of debate on the divisive issue.  In the House, Rep. Joe Atkins, DFL-Inver Grove Heights, said insurance companies have "jerked around" too many families.  
   

"Delayed and denied, delayed and denied, because the insurance company knows that if they do that long enough, eventually they'll wear people down," Atkins said. "They know that the legal fees will be higher than the claim itself if they just wear people down and make them go away."

 
Atkins pointed to the experience of Kevin and Barb Christianson of Nicollet. Their daughter, Sarah, was killed in a car accident three years ago. But the couple had to hire a lawyer to get the payment they felt their insurance company owed them. 
 

"Pretty much everything is tilted towards the insurance companies," Kevin Christianson said. "Any burden of proof is on us.  The assumption is that they don't have to pay the policy until you can prove they do have to pay the policy." 

But the insurance industry argues the proposal would offer no new protections to consumers. Mark Kulda, of the Insurance Federation of Minnesota, maintains the only thing consumers would get is higher premiums, and insurance companies would face more lawsuits. 

"It authorizes a new cause of action against an insurance company, not for the dispute against the claim but how the claim was handled. And the problem with this bill is the trigger that would allow the lawsuit would be weakest in the nation. We would be the easiest state in the country to sue an insurance company for unnecessary purposes," Kulda said.

 
In a letter to lawmakers, Gov. Pawlenty described the issue as "a turf battle" between trial lawyers and the insurance industry. Republican House Minority Leader Marty Seifert of Marshall agreed, and tried to send the bill back to the drawing board.  

 
"I can tell you right now that this bill is going to be vetoed. So, let's not waste everyone's time by pretending that this has some kind opportunity to be signed, because it does not," Seifert said.

 
The dust-up nearly overshadowed the rest of the huge public safety bill. The legislation includes  money for hiring additional police officers, judges and forensic scientists. It would also tighten laws against domestic violence, using the Internet to pray on children, and  stealing scrap metal.  

Rep. Michael Paymar, DFL-St. Paul, the chairman of the House Public Safety Finance Division, didn't want to see the dispute over insurance scuttle  the entire $2 billion bill. 

"You're going to bring down a bill that protects victims in the state of Minnesota. And you're going to bring down a bill that provides crime prevention efforts all through this state, over one little provision. Governor Pawlenty, I urge you to reject that notion," Paymar said.

 
The agreement between the governor and legislative leaders allows for negotiations to continue on a separate bill on the good-faith insurance matter. Spokesman Brian McClung said the governor will now sign the public safety bill.   

 "It showed that if governor expresses serious concerns about a provision that DFL leaders take that seriously and they're willing to work with our office to compromise. And everybody finds a way to give a little bit and work on these issues," McClung said.

 The willingness to compromise will be tested more as the legislative session moves closer to the May 21 deadline. Gov. Pawlenty is still threatening to veto other DFL-backed budget bills over tax increases, spending levels and policy disagreements.

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Politics and Government News

Tim Pugmire

Author

In a last-minute concession to Gov. Pawlenty, DFL leaders removed a provision that would have made it easier for people to sue insurance companies. The Republican governor had threatened to veto the entire $2 billion bill over the  "good faith" provision.

Pawlenty wins showdown with Dems over public safety bill

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