Nevada’s Law on Auto Insurance Rollbacks Upheld

A federal judge on Friday upheld Nevada’s law requiring insurance companies to roll back auto policy premiums 15% below July, 1988, levels and freeze them there for one year.

But after ruling from the bench, U.S. District Judge Bruce Thompson granted a 10-day stay, allowing insurance company attorneys to move their challenge of the law to the 9th Circuit Court of Appeals in San Francisco.

Attorney Frank Rothman, speaking for the eight insurance companies that sued Nevada over the 1989 rollback law, said he sought the stay so the companies wouldn’t have to cut auto insurance rates immediately. The new law was to have taken effect on Sunday.

In granting summary judgment to Nevada, Thompson said the Legislature has the power to regulate the insurance industry and apparently had just cause for the cutback move because of skyrocketing rates.

He also said the law is not unconstitutional because companies could apply for relief from the forced auto rate cuts one year after they take effect by applying for higher rates with the insurance commissioner.