Tennessee lawmakers will vote today on a bill which would alter how insurance
companies receive approval for changes from policy holders. This comes
on the heels of legislation last year that is sure to make insurance company
executives richer, while injured Tennesseans suffer.
This bill is very bad for consumers.
House Bill 2454 essentially will bind consumers or small businesses to a change in their
insurance policy by just the act of paying their bill.
"There are already too many instances of
Insurance Bad Faith," said Daniel Clayton, former President of the Tennessee Association
for Justice who practices with Kinnard Clayton & Beveridge. "If
an insurance company is going to change the terms of the policy, the policy
holder needs to be advised of those changes, and confirm he or she agrees
to those changes."
Lawmakers say a recent Supreme Court ruling exposed a weakness in insurance
policies which allows changes to be made to a consumer's policy without
a signature or binding agreement. Mary Mancini, director of Tennessee
Citizen Action, says Tennesseans' rights are being chipped away.
"There should be an agreement on those changes that are made within
that contract that's agreed to by each party. This really takes away
that ability in some instances for that consumer. "
As proposed, the bill assumes the policy holder agrees to a notified change
once the payment is made. Lawmakers who support the legislation say it
addresses the issue of customers who call their agent and request a change
but come back later and dispute the change because they never signed anything.
The bill, Mancini says, would hurt not only consumers but also any entity
which buys insurance - including small businesses which hire an administrative
person to handle all their bill payments.
"Consumers or small-business owners would have to prove that they
did not see any notice of or agree to the policy changes, and so this
puts the responsibility of proving that on the consumer."
