Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—W.D. Okla.: Insurer’s activity exempt from state consumer protection law, (Dec 9, 2014)

By Greg Hammond, J.D.

An Oklahoma business was unable to state valid claims under the Oklahoma Consumer Protection Act (OCPA) against The Travelers Indemnity Company of Connecticut based on damages resulting from a hailstorm. The federal district court in Oklahoma City determined that an insurer’s activity in the business of insurance falls under the regulated transactions exception of the OCPA (SAB One, Inc. v. The Travelers Indemnity Company of Connecticut, December 5, 2014, DeGiusti, T.).

SAB One, Inc. entered into an insurance contract with Travelers to provide coverage for real and personal property for its Oklahoma business. SAB alleges that after the insured property was severely damaged by a hailstorm, a timely claim was submitted to Travelers and Travelers confirmed the loss was covered under SAB’s policy. However, SAB claims that Travelers failed to pay the full amount of coverage due under the policy, and brought an action—in part—under the OCPA. Travelers moved to dismiss the OCPA claim.

In support of its motion to dismiss, Travelers argued that an insurer cannot be held liable under the OCPA, because insurance is a regulated industry under control of the Oklahoma Insurance Commissioner, and the OCPA expressly exempts transactions regulated under laws administered by regulatory bodies or officers acting under the statutory authority of Oklahoma. The court agreed, finding that the alleged conduct by Travelers in the instant case involved conduct of insurers in the marketing and sale of insurance policies, disclosures of information, and the adjustment of claims—which are all encompassed in the regulatory authority of the Insurance Commissioner under the Oklahoma Insurance Code. Because an insurer’s activities in the business of insurances fall under the regulated industry exemption of the OCPA, the court granted Traveler’s motion to dismiss the OCPA claim.

The case number is CIV-14-1085-D.

Attorneys: J. Drew Houghton (Foshee & Yaffe) for SAB One, Inc. Carl E. Pfanstiel (Taylor Burrage Foster Mallett Downs Ramsey & Russell) for The Travelers Indemnity Company of Connecticut.

Companies: SAB One, Inc.; The Travelers Indemnity Company of Connecticut

Cases: StateUnfairTradePractices OklahomaNews