House should follow Senate and pass insurance measure
The overwhelming vote in the Senate for a bill designed to address the problems created by recent Ohio Supreme Court rulings on the issue of uninsured and underinsured motorists should not be lost on the House of Representatives.
While the debate over the state's biennium budget, in general, and funding for primary and secondary education, in particular, have captured the headlines, the "Uninsured/Underinsured Motorists Availability Act of 2001" certainly warrants the characterization of its sponsor, Sen. Scott Nein, R-Middletown -- "the second most important piece of legislation in this session of the General Assembly."
Why? Because the court's rulings are having a devastating impact on Ohio's insurance marketplace and a broad spectrum of auto insurance consumers, especially Ohio companies that have an active fleet of vehicles, or even one vehicle, as part of their operations.
Potential liability: According to figures from Ohio's top commercial and insurance writers, two recent court rulings in particular that expanded the uninsured/underinsured laws will cost at least $1.5 billion in additional potential liability for insurers when offering the coverage.
It is important to note that Sen. Nein's bill does not do away with this particular coverage. It merely eliminates the provisions in the law that makes it a requirement for insurance companies to offer uninsured/underinsured coverage. If the House goes along with the changes and Gov. Bob Taft signs the legislation into law, motorists in Ohio who desire such coverage would have to ask for it.
Of significance to employers, the law would provide an allowable exclusion from coverage under an employer's insurance policy when the employee is not acting within the scope of employment. And it would provide a two-year time period within which insureds may make a claim under their coverage.
As Nein put it in his floor speech on behalf of the bill, "Ohio's reputation as having a healthy, available and affordable insurance marketplace has been severely tarnished by the Ohio Supreme Court again. While I recognize the make-up of the current court does not afford us any comfort that this legislation will not be misinterpreted, I am confident that it will provide immediate stability to Ohio's insurance marketplace and maintain competition, which ultimately benefits consumers."
In one ruling, the supreme court held that Kathryn Scott-Pontzer could claim uninsured motorist benefits under a commercial auto policy that her late husband, Christopher Pontzer, had through his employer, Superior Dairy.
Auto accident: The insurance company had denied the claim because the corporation and not the individual was the named insured and that Pontzer was not acting in the scope of his employment when he was killed in the auto accident. He was driving his wife's car and was on a personal errand at the time of the accident. But the court ruled 4-3 that Pontzer qualified as a named insured because corporations can only act through their employees and because the policy did not specifically state that employees had to be working to be covered.
The justices ignored the fact that the individual would not have had insurance coverage had he not been an employee of the company.
Such rulings have sent shockwaves through the business community. Senate Bill 97 provides commonsense remedies to the problems inherent in court's reading of the laws as they now apply to uninsured and underinsured coverage.