Judge Rules W.V. Insurance Commission Must Reveal Sources in Third-Party Bad-Faith Lawsuit Study

A West Virginia Circuit judge has ruled in Charleston that the West Virginia Insurance Commission must reveal the names of companies and organizations it consulted to complete a study that recommended eliminating third-party bad-faith lawsuits.

Kanawha Judge Paul Zakaib made the order at the request of a group of plaintiff’s lawyers who believe that the report was written to help the insurance industry as it lobbies lawmakers to end third-party bad-faith lawsuits.

The lawyers, led by John Skaggs of Charleston, will get the names of the Insurance Commission’s sources by Friday. They believe the information will “show that the insurance industry’s fingerprints are all over this process,” Al Karlin, one of Skaggs’ lawyers told the Charleston Gazette.

Skaggs, Karlin and other lawyers hope to use the information to derail Gov. Joe Manchin’s proposal to eliminate third-party bad-faith lawsuits. On Thursday, the Senate approved Manchin’s bill and sent it to the House of Delegates.

Manchin proposed the bill after the Insurance Commission issued a report concluding that West Virginians would probably see their auto insurance premiums drop if lawmakers ended the cause of action.
People file third-party bad-faith lawsuits against insurance companies they believe did not offer fair, timely settlements for their injuries. The insurer’s policyholders do not file the lawsuits, people who have claims against policyholders do.

Insurance Commissioner Jane Cline said her agency undertook the year-long study at the behest of lawmakers, not to help out the insurance industry.

“We were required to do the analysis,” she told the Gazette.
After the Insurance Commission issued the report in February, Skaggs filed a Freedom of Information Act request for the sources of the report, the data used by the report’s authors and drafts of the report.

He faced a major obstacle. Last year, lawmakers passed a law requiring the Insurance Commission not to release any data the study’s authors got from insurance companies.