Class Action Panel Disbanded

The National Association of Insurance Commissioners has disbanded a working group on class action litigation, apparently satisfied that such suits against the insurance industry do not pose a serious threat to the regulatory process.

The action came during the group's winter meeting earlier this month, when it disbanded the Class Action Litigation Working Group.

Steve Parton, a representative from the Florida Office of Insurance Regulation, said the lack of compelling evidence from a Rand study currently underway on the subject indicated the group's work was complete.

At the meeting, Nick Pace of the Rand Institute for Civil Justice said that under some circumstances, class action litigation can act as a shadow mechanism for regulation.

The results of the study will be available early next year. The survey asks company insurance lawyers to evaluate class action suits and the impact of those suits on the regulatory process.

Earlier this year, a committee of the American Legislative Exchange Council approved a model law that would limit the ability of trial lawyers to file class action suits that undermine the authority of state regulatory agencies.

Robert Detlefsen, public policy director for the National Association of Mutual Insurance Companies, urged the NAIC panel to adopt such a measure earlier this year.

He said the Avery vs. State Farm case, dealing with the use of aftermarket auto parts, is the kind of class action suit that seeks to overturn regulatory decisions made by state legislators and regulators.