Opposition Mounts Over Ohio Insurance Law Change

June 26--COLUMBUS -- Business leaders and House Republicans are putting on a full-court press to kill off a major change to Ohio insurance law that was quietly inserted into the 4,300-page state budget bill by the Ohio Senate.

Opposition came shortly after the GOP-controlled Senate, led by Senate President Keith Faber of Celina, inserted 66 lines that would dramatically alter the way Ohio's insurance laws have stood for more than a decade.

House Insurance Committee Chairman Bob Hackett, R-London, said Faber and Senate Finance Committee Chairman Scott Oelslager, R-Canton, insisted that the language remain in the bill, despite an avalanche of opposition.

"All of us are pushing the governor to veto it," Hackett said. "I'm strongly against it. It'll cause health insurance premiums for all of us to rise."

The Ohio Alliance for Civil Justice, which includes the Ohio Chamber of Commerce, Ohio State Medical Association, NFIB Ohio and others, whipped off a sternly-worded letter to Faber that warned: "We believe that the changes proposed in this amendment will have a widespread negative impact on Ohio's civil justice system by undercutting existing contractual relationships, disincentivizing cost control during litigation and potentially increasing health care premium costs to Ohioans."

Chief executives of 29 insurance companies signed a letter to Gov. John Kasich, urging a line-item veto and warning that the proposed change would touch every aspect of insurance in Ohio.

The budget must be finalized by Tuesday, meaning Kasich has until then to announce any line-item vetoes.

"A change of this magnitude would have far-reaching consequences for the insurance market, consumers of insurance, business community and our state's civil justice system alike," the insurance executives said.

Opponents of the change say it'll tip the scales in favor of plaintiffs' attorneys. Faber, who refused to say who in the Senate advocated for the change, defended the new language and called it "pro-consumer."

"It is a fair provision that recognizes the rights of insurers and says essentially we are going to balance the recovery between insurers and insured when the insured -- the individuals, Bob and Betty Buckeye, if you will -- aren't made whole from their recovery from a third party," Faber said. "Look, insurance companies have been putting provisions in their contracts that allow them to step to the head of the line."

Subrogation is the legal right for insurers to recover money from third parties to help cover insurance losses. For example, if a motorist isn't at fault in an auto accident, his insurance company pays expenses related to the wreck and then seeks payment from the at-fault driver's insurance carrier.

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