Legislation that would make the insurance industry subject to Oregon’s Unlawful Trade Practices Act (UTPA) is back under consideration, renewing debate over whether insurers should face expanded liability under consumer protection laws.
Senate Bill 174 would remove the exemption the insurance industry has had since the UTPA was enacted in 1971. The act governs a broad set of business conduct rules, including civil penalties, price discrimination, antitrust enforcement, and fair marketing practices.
Insurance was excluded from the statute due to concerns from the industry about overlapping oversight, according to Kenton Brine (pictured above), president of the NW Insurance Council.
Brine said the proposal would allow claims handling disputes to be litigated under the UTPA rather than through existing insurance regulatory channels. He argued that this would expand liability to cover both major and minor violations, including administrative issues that already fall under the state's Insurance Code.
He said the legislation “creates a new avenue for insurers to be sued” on both first- and third-party claims and warned that minor violations – such as formatting issues in policy documents – could become subject to litigation.
Further, Brine said that the result could be market instability, as insurers face greater legal uncertainty and potential increases in operational costs.
SB 174 comes amid a challenging environment for Oregon’s property insurance market, which has already seen rate hikes in response to rising wildfire risk. Brine said the bill could lead to higher legal and planning expenses for insurers, and those costs are likely to be passed on to policyholders.
Lawmakers in Oregon have considered similar proposals before. Brine said a version of the bill nearly passed in 2023 but failed in the final hours of the session when a legislator left the Senate floor early over unrelated legislation.
The bill had not yet cleared the House, and Brine noted that time constraints might have blocked its passage even if it had cleared the Senate.
According to the Oregon Department of Justice, Oregon is among 22 states that currently exempt the insurance industry from their UTPA statutes. In contrast, 33 states, including Washington, have incorporated insurance into their consumer protection laws.
Notably, data indicates that premium rates in these states are not higher than in those where insurance is exempt, suggesting that such inclusion does not necessarily lead to increased costs for consumers.
Connecticut serves as an example of a state where insurance practices are regulated under both the Unfair Insurance Practices Act (CUIPA) and the Connecticut Unfair Trade Practices Act (CUTPA).
This dual regulatory approach allows for comprehensive oversight of insurance activities, addressing both industry-specific misconduct and broader consumer protection concerns.
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