Oregon legislators are again reviewing a proposal that would bring the insurance industry under the scope of the state’s Unlawful Trade Practices Act.
The Act, in effect since 1971, covers various business issues, including civil penalties, antitrust provisions, marketing regulations, price discrimination, and disputes involving trade secrets.
The insurance sector was originally excluded due to industry opposition, as it was, and remains, subject to significant regulatory oversight, according to Kenton Brine, president of the NW Insurance Council.
Senate Bill 174 would apply the Unfair Claims Settlement Practices Act under the Unlawful Trade Practices Act. Brine stated this shift introduces the risk of lawsuits on both first- and third-party claims.
He argued this falls outside the original intent of claims regulations and could open the door for legal action over minor violations, such as font size in policy documents that conflict with insurance code.
Significant violations by an insurer can result in a lawsuit, but insignificant violations — like the size of your font in a policy that violates the insurance code — could also become subject to a lawsuit.
Kenton Brine, president of the NW Insurance Council
“Shifting that regulatory framework into a statute that allows for lawsuits is going to create havoc in the marketplace,” Brine said.
Brine warned that passing SB 174 could disrupt the state’s insurance market. He said insurers would face higher litigation and compliance costs, which would likely be passed on to consumers.
The market already faces pricing pressure, with property rates rising due to increasing wildfire threats.
The bill could also subject insurers to overlapping enforcement by both the Oregon Department of Consumer and Business Services and the state attorney general.
Brine noted that Oregon already allows regulators to compel restitution payments from insurers — a power not widely available in other states. A similar bill in Washington state failed earlier this year.
He criticized the proposal as a step in the wrong direction, especially as the state tries to stabilize the insurance market and encourage insurer participation.
This type of legislation has surfaced regularly over the past decade, typically appearing every other year.
In 2023, a version of the bill nearly passed when it reached the Senate floor on the final day of the session. It failed due to a lawmaker leaving early over an unrelated dispute, which left the bill without enough votes.
