By Calvin Call

After nearly 4 decades of leading the insurance industry in the legislative arena, Calvin Call has turned over the reins to Brandon Koch who, as the new Executive Director of Missouri Insurance Coalition (MIC), promises to, among many other responsibilities, continue the pursuit of much needed tort reform in Missouri. Koch, who holds a Chartered Property Casualty Underwriter (CPCU) designation, comes from Farmers Insurance with over 25 years of claims, marketing and government affairs experience. He will focus on key measures to ensure the Missouri insurance marketplace remains stable and competitive.

With respect to legislative goals, Koch acknowledged venue shopping is a priority of both the business and insurance industries. By definition, venue shopping is the practice of trial lawyers bringing their cases to a particular court that is likely to provide them with the most money, often times in the form of excessive judgments, even when there is little or no connection between the legal issues and people involved in the case and the venue where it is being tried. This practice drives up the cost of insurance for all consumers. In fact, venue shopping is a major reason that the U.S. Chamber of Commerce has rated Missouri near the top of the list for worst lawsuit climates in the country.

Koch said liability in the civil justice system should also reflect a person’s responsibility for a plaintiff’s injury. In Missouri, however, a person or business can be required to pay damages at levels that are disproportionate to that party’s fault. This occurs because of joint and several liability and court decisions that prohibit jurors from considering the responsibility of people who are not before the court. The Insurance Industry is in favor of legislation which would allow juries to consider the responsibility of any person that contributed to an injury and would calculate damages based on each person’s level of fault.

Asbestos claim abuse is another important reform issue that needs to be addressed by the Missouri General Assembly. Some asbestos plaintiffs’ law firms manipulate the dual compensation system to obtain double recoveries. In the tort system, claimants allege exposure only to the products of solvent companies (but not to the products of bankrupt companies) and recover millions of dollars. Separately, claimants also submit claims to the trust funds where they allege exposure to the products of bankrupt companies and recover millions of dollars. The double recovery is kept secret from the tort defendants by the claimants failing to disclose evidence of their trust claims and exposure to bankrupt defendants’ products in their tort lawsuits. Asbestos transparency legislation will require disclosure by asbestos plaintiffs and their counsel of trust fund claim information before proceeding to trial on an asbestos-related tort claim. 

As a coalition representing all lines of insurance, Koch recognizes that health insurance is of interest to all Missourians and we continue to work with the key stakeholders to promote stability, access and affordability in the marketplace. Koch stated great progress was made last session with respect to health carrier reimbursement for emergency care and out-of-network services. This year, focus will be placed on addressing excessive air ambulance charges and the development of a Prescription Drug Monitoring Program. Currently, Missouri is the only state without a recognized statewide prescription drug monitoring program.

In addition to legislative efforts, MIC maintains a good working relationship with the Missouri Department of Insurance, Financial Institutions and Professional Registration (MDIFP) helping keep Missouri accredited with the National Association of Insurance Commissioners (NAIC) by passing model laws relating to claims, trade practices, solvency and related issues of compliance. This allows MIC member insurance companies to operate in compliance with the many state and federal laws, and compete in a fair and open marketplace.

Although MIC may be best known locally for its strong governmental affairs program, working on various issues such as the aforementioned tort reform, Koch said we shouldn’t lose sight of the many other positive aspects surrounding the Missouri insurance industry. For example, there are over 2,000 insurance companies licensed to operate in Missouri, of which 226 are domiciled in the state. It is estimated that over 65,000 persons are directly employed by the Missouri insurance industry. In addition to those people directly employed, for every ten workers employed by an insurance company, four additional jobs are created elsewhere in the economy. Also, premium taxes paid by insurance companies are one of the major sources of tax revenue for the state. For foreign insurance companies, fifty percent of the premium tax is earmarked for education and fifty percent goes into the general revenue fund. For domestic insurance companies all of the premium tax goes into the general revenue fund. 

Insurance companies also represent a substantial investment in our state. According to law, companies must comply with various deposit securities of the Missouri Insurance Code. These deposits are held to guarantee the payments of policy claims and to ensure certain rights to policyholders. 

Without insurance and the management of risk by licensed professionals, Missouri’s economic system would not be the same. A serious automobile accident, fire, illness or other catastrophe could wipe out a family’s life savings. Additionally, financial institutions would be reluctant to grant credit for automobiles or homes.

Liability coverage, a benefit of most casualty insurance policies, pays for legal defense costs even though the person is not at fault. If they are at fault, the insurer pays their legal obligation in addition to their defense costs.

Missourians should pay a premium proportionate to the risk they represent, and not one that is inflated by a lot of unnecessary legal costs. That brings us right back to why we support meaningful tort reform in Missouri, Koch concluded.

Call retired as the first Executive Director of the Missouri Insurance Coalition effective December 31, 2018.

This opinion piece appears in the January 2019 Missouri Times Magazine.