BULLETIN NO. 2022-01
|To:||ALL PROPERTY AND CASUALTY INSURERS LICENSED IN OKLAHOMA|
|Re:||LANE v. PROGRESSIVE NORTHERN INSURANCE CO. 2021 OK 40|
|From:||GLEN MULREADY, INSURANCE COMMISSIONER|
|Date:||February 9, 2022|
PURPOSE OF THIS BULLETIN
The purpose of this bulletin is to inform all property and casualty insurers of the Oklahoma Supreme Court’s recent decision in Lane v. Progressive Northern Insurance Co. On June 29, 2021, the Oklahoma Supreme Court addressed the following question of law:
Does Progressive’s UM (Uninsured Motorist) Exclusion—which operates to deny uninsured motorist coverage to insureds who recover at least the statutorily mandated minimum in the form of liability coverage—contravene Oklahoma’s Uninsured Motorist Statute, codified at 36 O.S. § 3636?
Progressive’s UM Exclusion (the Exclusion) operates to exclude uninsured-motorist coverage when the insured receives liability coverage in an amount equal to or greater than the minimum limits of liability prescribed under Oklahoma law. The two plaintiffs in this case each had damages in excess of $100,000, which was the policy liability coverage amount. Due to the additional amount of damages over the $100,000, the plaintiffs sought damages under the policy’s uninsured motorist coverage. However, because the plaintiffs in this case both recovered $100,000 under the policy’s liability coverage—which is greater than the Oklahoma statutory minimum of $25,000 —Progressive denied their uninsured-motorist claims by relying on the UM Exclusion.
The Court ruled the Exclusion violates the terms of 36 O.S. §3636 and found it to be against public policy, therefore void and unenforceable. The Court reasoned that the Exclusion neither protects the policyholder’s choice to accept uninsured-motorist coverage, nor represents a validly agreed upon exclusion from that coverage.
A link to the case can be found here: https://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=489176
The Oklahoma Insurance Department encourages readers of this bulletin to periodically check the Department’s website at https://www.oid.ok.gov for news and updates to bulletins and other relevant material.
Questions applicable to this bulletin should be directed to:
Antuanya “Bo” DeBose of the Legal Division at firstname.lastname@example.org.