Recently, North Carolina insurance companies sought to change standard personal auto policy UM/UIM arbitration clauses. The change was from provisions that were unilateral, elective, binding—those within the insured’s power to control—to provisions that were bilateral and elective, those requiring the insurance company’s consent. The North Carolina Rate Bureau (NCRB) actually approved these requests, which were made by member insurance companies and buried among numerous other technical changes. Fortunately, the Commissioner of Insurance withdrew his approval for these changes when he became aware of them. Such a change would have tipped the balance of power strongly in favor of the insurance industry. This is but one example of an effort by the insurance industry to use arbitration provisions as a tool to diminish consumer choice.
UIM carriers are litigating a variety of issues that also aim to prevent an insured from being able to demand arbitration. For instance, some UIM carriers have contended that if they advance payment in an amount equal to the amount tendered by the liability carrier, this is not an exhaustion of liability coverage. Others have raised defenses based on the statute of limitations or have argued that an insured has waived his or her right to demand arbitration by participating in discovery, or by waiting too long to demand arbitration. Some of these arguments were based on policy language in the standard auto policy before the 2008 and 2009 amendatory endorsements (Appendix A) came into effect. However, similar arguments may be advanced under current policy language or policy language that existed after the 2008 endorsement came into effect but before the 2009 endorsement superseded it. These efforts will be discussed in Section IV.
There are rumblings that new efforts are again underway. We will see.