Insurers and other businesses are spending millions on areferendum to overturn a new Washington law that eases requirementsfor filing bad faith actions against carriers, a trade grouprepresentative said today.

“This is a large-dollar, spirited campaign which is definitelyrunning into the millions,” said Dana Childer a spokesperson forthe Des Plaines, Ill.-based Property Casualty Insurers Associationof America (PCI).

The business effort far outstrips a countercampaign byattorneys. So far it reports spending only a few hundredthousand.

In addition to PCI, the business coalition supporting the“Reject Referendum 67, Consumers Against Higher Insurance Rates”campaign includes the American Insurance Association and theNational Association of Mutual Insurance Companies.

The campaign is an effort to persuade Washington residents tovote against Senate Bill 5726, the Insurance Fair Conduct Act, inthe November elections, said PCI spokesperson Kenton Brine.

The bill, signed by Gov. Christine Gregoire in May, establishesa statutory right to sue an insurer for bad faith, sets the lowestthreshold for allowing lawsuits against insurers, and allows forplaintiffs to impose triple damages on the insurers, according toPCI.

The legislation makes it easier for “every single insuranceclaim to be a bad faith,” said Ms. Childer. In her organization'sview, SB 5726 also makes Washington among the worst states in thenation for settling insurance claims.

“This law creates an environment in which every insurance claimholds the potential to become a 'bad faith' lawsuit,” said Mr.Brine.

The first phase of the Reject 67 campaign began in May and endedin July. The second phase ends in November, said Ms. Childer.

The campaign surpassed the required 112,440 signatures needed toqualify for a referendum on the ballot, tallying 155,220 signaturesin total. Submitted Friday, the signatures are currently beingverified by the Secretary of State's Office.

To explore a possible legislative solution to the problems posedfor insurers by the law, Gov. Gregoire convened a working group toestablish a dialogue between insurers and the Washington StateTrial Lawyers Association, but no action was taken on thereferendum during those sessions and SB 5726 action will bepostponed till the November elections.

The Washington State Trial Lawyers Association has its owncampaign, “Approve 67,” a coalition of consumers, seniors,firefighters, labor leaders, small-business owners, progressives,attorneys, families and citizens who want to protect consumers fromunfair insurance practices, according to the campaign's officialWeb site.

The campaign's total contribution has exceeded $200,000, saidWSTLA spokesperson Sue Evans.

Referendum 67 establishes an incentive to deal with legitimateclaims fairly by letting the court assess penalties if an insurancecompany illegally denies or delays payment of a claim, according tothe campaign Web site.