Insurance Commissioner Advocate for Wrong Side

The following article was taken from the Daily Local News, West Chester, PA on Tuesday, July 23, 1991.

Guest Column

By Leonard A. Sloane.

Don’t be too quick to give up your rights.

On Tuesday, June 25 a guest column by the Insurance Commissioner, Constance Foster, appeared in the Daily Local News.

When I read it, I became disturbed that Foster, by possibly exhibiting her own prejudice, is going beyond her role as Insurance Commissioner with the Casey administration.
By manipulation of insurance rates, she is attempting to change the intent of the Legislature and erase an automobile insurance plan which was passed by both houses and signed into law by the governor.

Specifically, Act 6 of 1990 was a series of amendments to the auto insurance laws which carefully balanced the protection of a Pennsylvania citizen’s access to the courts with a reduction in automobile insurance premiums. This was achieved by giving the consumers a fair choice on whether they want to keep their rights.

It was not easy for the Legislature to impose such restrictions on the right to sue. The Legislature was concerned with the effect of creating two classes of persons, those who could afford to buy their rights and those who could not. That is why the NAACP, American Association of Retired Persons, Citizens Action Coalition and other citizens groups were opposed to any limitation on the right to sue.

The Legislature also decided to impose a 10 percent, across-the-board rollback of rates for the benefit of all policy holders regardless of whether they chose to limit their rights.

The members of the General Assembly felt that with this 10 percent reduction for all citizens of Pennsylvania, and an additional 12 percent savings for those who did choose to limit their rights, they could achieve the proper balance between premium savings and access to the courts.

Obviously, it was the intent of the Legislature when the law was passed that our citizens should be presumed to want to keep their rights. In this regard, a procedure was enacted into law whereby policy holders had to fill out a form and specifically choose the limited tort option if they wanted to give up their rights.

Therefore, it is obvious that the new law favored allowing a citizen to keep his or her rights, but with the option to do otherwise if premium dollars were the only major consideration.

It is ironic that Foster now makes suggestions concerning saving money on premiums, yet as insurance commissioner, she caved in to virtually every insurance company in the state which had asked for extraordinary rate relief.

Right out of the gate Foster began to give relief exempting companies from providing citizens with the 10 percent across-the-board savings. If Pennsylvania had a comprehensive data disclosure bill and a consumer advocate, rate requests could be monitored by citizens along with the insurance commissioner to prevent unnecessary rate increases.

However, it is no wonder that Foster is pushing limited tort. By liberally allowing rate increases, she gave away mandated across-the-board savings that the Pennsylvania Senate specifically required in the legislation.

In the column, Foster stated, “from now on, the cost difference between the full and limited tort option will continue to widen.” She seems to be trying to accomplish, by the power of her office, what the Legislature and the governor agreed not to do.

Nowhere did the Legislature ‘intend to create a system biased against those who want to keep their rights. Moreover, nowhere did the Legislature intend to create a system where only the affluent would be able to keep their rights.

Aside from the customer issues involving inability to afford to buy one’s rights, I believe that her manipulation of rates will lead to a constitutional attack on this new law.

If the insurance commissioner is interested in protecting Pennsylvania policy holders, she should police the insurance industry, which is abusing the system and abusing the medical profession.

The industry is unfairly interfering with the doctor-patient relationship by arbitrarily cutting off medical treatment and refusing to pay legitimate doctor bills under the guise of “peer review” by the industry.

Moreover, the commissioner did not, at any time, mention other ways to save money which the legislators provided in Act 6, e.g., higher deductibles, reducing medical coverage to $5,000, declining duplicative wage loss, anti-theft devices, airbags, senior citizen driving school discounts, strong anti-fraud measures and so on.

Duplicate coverage in the health care area should be eliminated. If a person has a good private health plan, why pay twice?

Foster should refrain from being an advocate for the insurance industry. States which have the fewest requirements and the simplest auto insurance systems have the cheapest rates for all citizens. Instead of imposing her will and advocating a certain philosophical bias, Foster should remain neutral and search for ways to improve our present system and allow people to make their own choices, without economic pressure.

Leonard A. Sloane, of East Goshen, is Immediate past president of the Pennsylvania Trial Lawyers Association.