Courts May Be only hope in Insurance Regulation Power Imbalance


In the fight against bad faith insurance practices, consumers have it all uphill. As only individuals coming up against a multibillion-dollar industry whose profits have recently soared, they have very limited resources. They are supposed to receive help from the state regulatory boards that ostensibly govern the practices of insurance companies. However, there’s only one problem: the regulatory boards are themselves too small and are easily overpowered or corrupted by the insurance industry.

Consider, for example, the case of an Albuquerque, New Mexico woman who contracted lupus, a life-threatening autoimmune disorder that could only be cured with a bone marrow transplant. If she did not receive the transplant, her doctors said, she would be dead in six months. Unfortunately, the woman’s health insurance company, Lovelace Sandia Health System, Inc, told her the transplant was not covered. It is unclear what kind of medical insurance policy would not cover a life-saving treatment without flagging that fact to policyholders, but when the woman appealed to the state regulatory agency, her appeal was denied by a board appointed by New Mexico Insurance Superintendent Eric Serna. Although Serna claims there was no wrongdoing or conflict of interest, income tax documents show that Serna’s private foundation, Con Alma, received over $60,000 in contributions from the insurance company. The same commissioner also spontaneously reduced a $400,000 penalty for an insurance company down to $25,000.

Although in neither case has the attorney general accused the (now former) Insurance Superintendent of wrongdoing, something certainly seems amiss. And what is striking is how paltry are the sums involved. The $60,000 contribution to the charity paid for itself in the case of the one marrow transplant, and who knows how many other favors may be in the offing.

If you are failed by the regulatory bureaus, the only place you can find help is through the court system. Contact today to find a local personal injury lawyer who is willing to take your fight to the insurance company.