In California, few industries are as heavily regulated as is the insurance industry. California has perhaps the strongest insurance laws in the nation designed to protect its policyholders, including regulations to ensure that carriers have sufficient resources to pay claims, to control the manner in which premiums are calculated, and to regulate specific language within the policies. This is especially true with workers compensation insurance, where the laws require insurance carriers to be subject to oversight by the Department of Insurance, including the agency’s approval of all insurance policy forms.
Over the last several years, many insurance carriers have attempted to skirt the state’s control over workers compensation policies, particularly those types of policies known as “high deductible” policies (in which, typically, the employer pays all claims up to a certain value) by putting provisions relating to calculating premiums and collateral not in the policies themselves, but in separate agreements that are commonly referred to as “side agreements”. These agreements are often not even approved by the Department of Insurance, and cannot or would not be approved because they contain oppressive and unfair provisions regarding premium and collateral. These agreements oftentimes go so far as to deny employers access to courts to protect their rights through the inclusion of arbitration agreements, which require employers to sue or arbitrate in other states and under the laws of states where they do not do business.
Roxborough, Pomerance, Nye & Adreani, LLP has been at the forefront of the fight to protect employers against these unfair agreements. RPNA has repeatedly and successfully opposed the enforceability of these “side agreements” before the Department of Insurance and in the courts.
A few days ago, RPNA won another major victory against an insurer engaging in similar tactics, Protective Insurance. Protective, in response to a lawsuit for bad faith claims handling filed in a Los Angeles Federal Court, tried to sue its policyholder in Indiana claiming it failed to pay amounts due under its policies and side agreements. RPNA, along with counsel in Indiana, obtained an order dismissing Protective’s lawsuit, thus protecting the employer’s right to prosecute its claims in California, and ensuring that California law, and not the law of a another state, controls how Protective is required to handle the employer’s claims collateral in good faith.
For more than 30 years, RPNA has been fighting for the rights of employers against insurers’ unfair conduct. It has protected employers against bad faith insurer conduct before the Department of Insurance, in state and federal courts statewide (including the California and U.S. Supreme Courts), and as this week’s victory shows, nationwide. We encourage any employer which feels it has been treated unfairly in any manner by its workers compensation carrier to contact us and discuss its legal rights and remedies.