We write to bring to your attention an opinion of substantial significance issued by the Pennsylvania Supreme Court on December 30, 2005. In Insurance Federation of Pennsylvania v. Koken, the Supreme Court holds that the Insurance Commissioner exceeds her power when she requires an insurer to include an arbitration clause in the UM portion of its automobile policy. As the opinion points out, at least since the mid-1990's many insurance companies have attempted to withdraw such provisions from their policies (or to make arbitration optional if both the insured and insurer agreed), but such efforts have been met with constant rejection by the Insurance Department. It would appear that carriers are now free to revise or remove arbitration clauses should they wish to do so. Although the opinion does not directly deal with UIM coverage, its holding would appear equally applicable to such coverage.
If you would like to read a copy of the opinion, please click here. You may also request a copy from my secretary, Denise Alosi, at 215-665-3321. Please feel free to call me if you have any questions.
Very truly yours,
Michael Saltzburg
For further information, please contact Michael Saltzburg, Esquire.
Telephone: 215-665-3340
E-mail: saltzburg@bbs-law.com
