93-04: Court Decisions Affecting Auto Insurers
* This bulletin was repealed by 08-05
To: All Automobile Insurers
From: Jay Angoff, Director
Re: Court Decisions Affecting Auto Insurers
Date: April 9, 1993
This bulletin is to advise companies of recent court cases that involve the interpretation of language contained in private passenger auto policies, and clarification required by the Department in the limit of liability of Uninsured Motorist coverage, and in the charging of SR-22 fees.
Under Uninsured Motorist Exclusions it is now prohibited to exclude any settlement the insured should make with a third party if made without the company's consent, unless the company can prove that it prejudices their right to recover. Tegtmeyer et al v. Snellen et al 791 SW 2d 737 (Mo 1990).
The family exclusion clause contained in the liability coverage is void with respects to any amount at or below the Financial Responsibility Limit -- Halpin et al v. American Family Mutual Ins Co, 823 SW2d 479 (Mo 1992).
Atlanta Casualty v. Salyer, Southern Dist, MO Ct of Appeals, #17251, October 1991, this case determined that a business use exclusion in a personal auto policy was void as violating public policy.
With respects to the limit of liability portion under UM coverage, Missouri does not allow any setoff of medical payments, worker's compensation, disability benefits law or similar law. Your policy must provide this statement: "This includes all sums paid under Part A but does not include any amounts paid or payable under: 1.) Part B, medical payments; or 2.) Any workers' compensation law, disability benefits law or similar law." Removing language referring to setoff is not sufficient.
Missouri Regulation 500-4.400 prohibits the use of any type of policy fee, service charge, inspection fees, and fees for regulatory filings including SR-22 fees. Any assessments used for an installment payment plan must be labeled premium installment charge. Money received by an insurance company for a contract of insurance must be stated as premium, reported on the annual statement and appropriately taxed.
If you have not already done so, it is required that you make the appropriate filings remedying any discrepancies in these areas. Any questions, contact Jennifer Hart in the Property & Casualty Section at 314/751-3365.