Insurance Commissioner Jones Wins Major Battle Against Insurance Industry as Supreme Court Affirms His Regulatory Authority
In a sweeping victory for consumers, Insurance Commissioner
Rejecting the insurance industry's arguments, the Supreme Court ruled the insurance commissioner has broad discretion to adopt rules and regulations as necessary to promote the public welfare. The insurance industry lost their challenge to Jones' consumer protection regulations that require insurers replacement cost estimates actually reflect the complete cost of rebuilding a policyholder's home after a fire.
"We have won an important victory for
"Climate change, years of drought, and more devastating wildfires have changed the landscape of
The regulations were needed because insurance companies were misleading consumers by giving them incomplete home replacement cost estimates, sometimes by removing key components from the actual estimates they calculated, in order to undercut competitors with lower premium. The practice unfairly left consumers who relied on their insurers' estimates unaware they were underinsured, and many could not rebuild after fires destroyed their homes.
The insurance industry, led by the
While the insurance industry did not argue insurers would have difficulty complying with the regulation, or that the general rule requiring all insurers' replacement-cost estimates include all costs necessary to replace a home is a bad idea, the industry argued that the regulation was overreaching by the commissioner.
Today, the Supreme Court rejected the challenge and affirmed the commissioner has broad authority under the Unfair Insurance Practices Act to adopt regulations prohibiting insurers from unfair practices, like misleading consumers into believing they have replacement-cost insurance coverage that is not intended to cover all costs of replacement.
The
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