MN House passes ‘good faith’ insurance bill

03/28/2008

By MARK BRUNSWICK,
Star Tribune
March 27, 2008


The Minnesota House today passed a bill that would expand consumers' rights to sue their insurance companies.

It would require insurance companies to act in "good faith" in denying claims from their clients or face penalties.

Hotly debated and lobbied by trial lawyers on one side and the insurance industry on the other, the bill passed the House 81 to 51. The House legislation differs slightly from a Senate version, and the two proposals have to be reconciled in a conference committee. The Senate version passed last week.

In a major compromise, both bills set limits on damages and attorneys' fees, making it more palatable to both sides. The bill would require a policyholder to show that the insurer had no reason to deny the claim and was reckless in its denial.