Referendum 67 race heats up

State insurance commissioner Mike Kreidler says the insurance-industry lobby is badly distorting history in its effort to counter the newest hard-hitting ad in the Referendum 67 campaign.

The features stars Kreidler and tells how motorist Ethel Adams was denied coverage for injuries she suffered in a car wreck in 2005.

The insurer balked at paying on grounds that the man who caused the wreck did it on purpose in a road-rage incident.

"She was an innocent driver severely injured by a road-rage incident. She was in a coma and disabled for life," Kreidler says in the ad targeting voters ahead of Tuesday's election.

"But her insurance company still denied her claim."

But the coalition of insurers and business interests opposing Referendum 67 said this week that the proponents' latest ad puts insurers in a false light.

Dana Childers of the Reject 67 campaign says the insurer did settle up — after Kreidler threatened Farmers Insurance with action that could have cost it the right to operate in Washington.

That proves the system works fine without Referendum 67's added protections, Childers said Thursday.

Consumers in Washington already can sue their insurers if they are denied payment for a legitimate claim, but unlike 44 other states, insurers face no penalty beyond the denied claim. Referendum 67 would let cheated consumers seek triple damages and attorney fees in court.

Childers also said that insurers worked cooperatively with Democratic state Rep. Mark Ericks to patch a loophole in the law that Farmers tried to exploit.

She painted the industry as cooperative.

Not so, says Kreidler, a Democrat who has become an unabashed advocate for Referendum 67.

"I am appalled that they would even attempt an argument like this based on the circumstances around Ethel Adams," Kreidler said in an interview.

"This is a company that found an excuse not to pay and took full advantage of it, even though it was customary practice to pay this kind of claim," Kreidler added.

Kreidler acknowledged Childers' argument — that insurers agreed to pay up after he threatened legal action. But he said a more important factor was the threat of two national television programs highlighting the company's refusal to cover Adams that made the difference.

Sue Evans of the Approve 67 campaign said the Adams case shows the referendum is needed, since Adams had to hire a lawyer to get results.

"It should not take a law firm, an insurance commissioner, the Legislature and the media to encourage an insurance company to pay a legitimate claim, but in the case of Ethel Adams, it did," Evans said.

Meanwhile Reject 67 is answering with an ad quoting a law lecturer, a business association president, a doctor and a corporate spokeswoman criticizing the referendum. They say it isn't needed, that the law already prohibits denial of legitimate claims, and that it would increase insurance rates by more than $200 a year per household.

"Trial lawyers win, family businesses lose," Creigh Agnew of the Liability Reform Coalition says in the ad.

Consumer groups have questioned the independence of the actuary, Milliman, that calculated the cost impact of Referendum 67. But Kreidler has hired the same firm for work at his agency.