Insurance Industry Hit With $11 Million Failure


The insurance industry's $11 million bellyflop against Referendum 67 was an election bright spot for ruling Democrats, who otherwise took their lumps from a frugal electorate that sent establishment ideas packing.

According to Curt Woodward, writing for the AP, the referendum, which allows triple damages in lawsuits alleging bad faith by insurance companies, spawned a lively campaign pitting the industry against trial lawyers.

Supporters said R-67 would give consumers a powerful tool to punish bad actors in the insurance industry. Opponents countered that it was an unnecessary magnet for unfounded lawsuits, and would drive up insurance rates.

But even though Washington voters displayed an anti-tax mood in other races around the state, they weren't swayed by the prospect of higher rates. R-67 cruised to victory, winning about 57 percent of the vote in unofficial returns through Wednesday afternoon.

Approve R-67 spokeswoman Sue Evans said the referendum fit squarely with voters' pocketbook-first mentality: if you pay for an insurance policy, you expect the company to play fair.

"Do people believe that insurance companies are going to be fair 100 percent of the time? Obviously, they don't," Evans said Wednesday. "And obviously, they expect to get what they pay for."

Reject R-67 spokeswoman Dana Childers sounded contrite, pledging to move past the bitter election and work with Democrats in Olympia. But opponents "remain convinced that Referendum 67 will result in more frivolous litigation and higher costs for consumers," she said.

The R-67 campaign was partially a proxy battle for the political parties, since trial lawyers often support Democrats and insurers are typically aligned with Republicans.

Supporters were also asking voters to endorse a plank of the Olympia Democrats' agenda, since the measure passed the Legislature on largely partyline votes and was signed into law by Democratic Gov. Chris Gregoire.

Democratic Insurance Commissioner Mike Kreidler -- up for re-election himself next year -- ended up with the sheen of a two-time winner and is clearly feeling his oats as a consumer advocate.

Kreidler, who successfully urged a double "no" vote on 2005's bruising medical malpractice initiatives, came out strong in favor of R-67 and won.

And even though his endorsement of R-67 in TV commercials prompted the opposition to question why Kreidler would "cede his authority to trial lawyers," Kreidler predicted a return to civility at the 2008 Legislature.

"I warned them in advance that if we were going to go to war, it was going to be difficult for me to do anything other than become active in support of the referendum," Kreidler said Wednesday.

"I would have been happier if we wouldn't have had to fight the battle at all," he said.