Three of the most influential property/casualty insurance associations have banded together to voice their displeasure about recent legislation passed in Washington State, saying that the law makes it one of the worst states in the nation for settling insurance claims.

The American Insurance Association (AIA), The National Association of Mutual Insurance Companies (NAMIC), and the Property Casualty Insurers Association of America (PCI) issued a release decrying the Insurance Fair Conduct Act (SB 5726), which was signed into law by Washington's Governor Chris Gregoire back in May.

The Act makes it easier for consumers to file litigation against insurers. According to the text of the bill, it allows, "any first-party claimants to a policy of insurance who is unreasonably denied a claim for coverage or payment of benefits by an insurer to bring an action in the superior court of Washington State to recover the actual damages sustained, together with the costs of the action, including reasonable attorneys' fees and litigation costs, up to three times the actual damages." As part of their strategy to fight the new legislation, the three associations have joined with consumers, community leaders, and business organizations to repeal the law via Referendum 67. They say that the law accomplishes nothing except additional fees for lawyers and higher premiums for policyholders. "This law creates an environment in which every insurance claim holds the potential to become a 'bad faith' lawsuit. Insurers are already required by law to act in good faith in the interest of their policyholders, and severe penalties exist for those who do not," said Kenton Brine, regional manager for PCI, in a release.