Tuesday, February 18, 2014
Environment - Anti-Kiger Environmental Insurance Coverage Legislation to be considered Thursday in Senate committee
HB 1241, which passed the House 57-36, will be heard in Senate Committee at 10 a.m. on Thursday, February 20, 2014. The bill digest:
Environmental coverage. Specifies the manner in which the meaning of "pollutant", as used in certain liability insurance policies, must be construed.The bill would add a new chapter IC 27-7-14 to the Indiana Code, setting by statute how the term "pollutant" shall be construed in insurance policies in the future.
Put more bluntly, the bill would eliminate insurance coverage for environmentally contaminated properties. The bill is being referred to by industry and local government as "The Anti-Kiger Environmental Insurance Coverage Legislation," referring to the 1996 Indiana Supreme Court decision, American States Insurance Co. v. Kiger and the long line of cases following it. This case law is what sets the standard for the insurance recovery rights Indiana property owners possess in remediating contaminated sites.
Opponents of the bill point out that:
- Insurance companies who have issued policies since 1996 have incorporated these potential environmental risks and exposure into their premiums which their policyholders have paid for the past 18 years. The proposed legislation would provide an improper windfall to these insurers who have included these potential risks in the premiums they have collected but would now be given a free pass by the legislation.
- The Indiana courts have made it clear that if an insurance company wants to exclude coverage for environmental liabilities they can draft specific language to do so, with both the Indiana Supreme Court and the 7th Circuit Court of Appeal upholding specific language chosen by two insurance companies to exclude coverage. Thus the insurers know that they do not need the Indiana General Assembly to write private contracts for private parties.
Posted by Marcia Oddi on February 18, 2014 07:39 PM
Posted to Environment