\n\u00a0|\u00a0 Oklahoma Watch<\/span><\/span><\/p>\n<\/div>\n
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<\/div>\n<\/div>\nHere are Oklahoma’s top headlines of the week for Dec. 12, 2025<\/p>\n<\/div>\n<\/div>\n<\/div>\n
On Dec. 4, Attorney General Gentner Drummond filed a petition accusing State Farm <\/a>of violating ORICO,\u00a0Oklahoma\u2019s version<\/a>\u00a0of the Racketeer Influenced and Corrupt Organizations Act (1970), the so-called RICO laws that were passed to\u00a0dismantle\u00a0La<\/a>\u00a0Cosa Nostra<\/a>, the Italian mafia.<\/p>\n State Farm has been\u00a0accused<\/a>\u00a0of racketeering before; the first time reads like something from The Godfather saga.<\/p>\n The story begins in 1997, when State Farm was caught\u00a0violating<\/a>\u00a0its own auto insurance policies by substituting aftermarket parts for bodywork. A 48-state class action lawsuit filed in Illinois resulted in a jury award of $1.1 billion. State Farm appealed.<\/p>\n In 2004, a circuit court judge from a small, rural county southeast of St. Louis, Lloyd Karmeier, mounted a long-shot campaign to win a seat on the Illinois Supreme Court. The race became the\u00a0most expensive judicial election<\/a>\u00a0in history, with $9.3 million raised between the two candidates. Karmeier prevailed and quickly provided the deciding vote in a decision that overturned the billion-dollar settlement against State Farm.<\/p>\n More: <\/strong>Oklahoma’s AG joins lawsuit against State Farm over unpaid roof claims<\/a><\/span><\/p>\n In 2009, a U.S. Supreme Court\u00a0case<\/a>\u00a0in West Virginia triggered a new investigation in Illinois \u2014 a retired FBI agent and a private investigator teamed up to prove that Karmeier had received as much as\u00a0$4 million<\/a>\u00a0in campaign donations from State Farm.\u00a0\u00a0<\/p>\n In 2012, State Farm was accused of violating RICO laws over the judge scandal, with\u00a0billions of dollars<\/a>\u00a0in damages being sought.<\/p>\n In 2018, just before the case went to trial, State Farm\u00a0settled<\/a>\u00a0for $250 million, saving the company from billions in potential losses and skirting a trial that could have permanently branded it a criminal enterprise.<\/p>\n Now, what happened in Illinois may be repeating in Oklahoma.<\/p>\n Drummond\u2019s petition is an attempt to\u00a0intervene<\/a>\u00a0in the most public-facing of as many as 200 cases that have been brought against State Farm in Oklahoma, alleging a practice of pre-denying claims of hail and wind damage to the roofs of policyholders.\u00a0<\/p>\n More: <\/strong>Oklahoma lawsuits accuse State Farm of billion-dollar hail scheme<\/a><\/span><\/p>\n \u201cThe Attorney General identifies the harm to numerous Oklahoma policyholders as proof of the \u2018pattern of racketeering activity\u2019 required by ORICO,\u201d the petition reads. \u201cTheir experiences demonstrate the scope and magnitude of State Farm\u2019s enterprise-wide scheme.\u201d<\/p>\n If District Court Judge Amy Palumbo grants the motion to intervene, Drummond will be able to exert substantial\u00a0subpoena powers<\/a>\u00a0to prove the existence of the alleged scheme.<\/p>\n Accusations of resembling a criminal enterprise have dogged the insurance industry from the moment of its modern incarnation.<\/p>\n Ever since the passage of the McCarran-Ferguson Act (1945), which provided the insurance industry with qualified immunity from enforcement of the Sherman Antitrust Act (1890), scholars have argued that insurance companies engage in what amounts to\u00a0state-sanctioned price-fixing<\/a>\u00a0and are\u00a0therefore susceptible<\/a>\u00a0to\u00a0cartel-like<\/a>\u00a0behavior. That is, insurance companies may cooperate in the same way that\u00a0OPEC<\/a>\u00a0in the oil industry collaborates to fix oil prices outside of competitive markets or the way drug cartels\u00a0divide territory<\/a>\u00a0for the production and distribution of illegal drugs.<\/p>\n Editorials in\u00a0Business Week<\/a>\u00a0and the\u00a0New York Times<\/a>\u00a0have suggested that the insurance industry is a cartel ripe for busting.<\/p>\n Reflecting on his own experiences as a patient and psychologist, Former Yale professor Jonathan Kellerman called on his second act career as a bestselling crime novelist to\u00a0characterize<\/a>\u00a0the insurance industry as a de facto crime syndicate.<\/p>\n \u201cThe health insurance model is closest to the parasitic relationship imposed by the Mafia and the like,\u201d Kellerman said. \u201cInsurance companies provide nothing other than an ambiguous, shifty notion of \u2018protection.\u2019\u201d<\/p>\n Jay M. Feinman, Distinguished Professor of Law at Rutgers University and author of a\u00a0book<\/a>\u00a0on why insurance companies don\u2019t pay out on claims, did not go so far as to liken the insurance industry to organized crime but listed a triumvirate of shady legal tactics that are difficult to square with an industry devoted to ethics and good practices.<\/p>\n Insurance companies, Feinman\u00a0argued<\/a>, prolong the claims process to exploit the financial desperation of policyholders. They reject valid claims based on technicalities and ambiguous language. And they force policyholders into prolonged litigation that they cannot afford to sustain.<\/p>\n Opinions have differed on whether RICO laws are enforceable against the insurance industry. In 1998, however, a ruling in the Supreme Court case\u00a0Humana Inc. v. Forsyth<\/a>\u00a0held that McCarran-Ferguson did not protect insurance companies from RICO laws if federal law did not interfere with state regulation.<\/p>\n That paved the way for\u00a0cases<\/a>\u00a0in which RICO was found to assist rather than impair state regulation.<\/p>\n Twenty-five years ago, a consortium of 700,000 physicians banded together to charge more than two dozen HMOs under RICO laws. Some of the HMOs fought back, and the charge of racketeering did not hold up in court. Others, like State Farm in the case in Illinois, opted for\u00a0multiple settlements<\/a>\u00a0totaling $1.7 billion, likely to\u00a0avoid branding<\/a>\u00a0as a criminal enterprise.<\/p>\n More recently, RICO charges have flowed both ways. In 2020, another physicians\u2019 group filed a lawsuit against UnitedHealthcare,charging<\/a>\u00a0RICO violations. In August, UnitedHealthcare\u00a0called on RICO<\/a>\u00a0laws to sue a group of radiologists. Since 2003,\u00a0Allstate has used RICO laws<\/a>\u00a0to seek $237 million in damages in 48 separate lawsuits against individuals and \u201corganized rings\u201d for alleged fraud.<\/p>\n In Oklahoma, the application of RICO laws has been uneven. In\u00a02001<\/a>, two individuals charged with stealing cows were convicted under RICO laws only to have their conviction overturned by the Oklahoma Court of Criminal Appeals, which judged the case not serious enough to merit the application of RICO.<\/p>\n The numerous crimes prosecutable under RICO in Oklahoma are detailed in Section\u00a01402<\/a>\u00a0of Title 22. Crimes that may be part of racketeering activity include homicide, sex offenses, arson, kidnapping, bribery, Medicare and workers comp fraud, and insurance fraud as defined in\u00a0Title 36<\/a>.<\/p>\n In 2007, in the wake of Hurricane Katrina, which cost insurance companies at least $11 billion, a\u00a0confidential report<\/a>\u00a0from McKinsey and Co., a management consulting firm, proposed a plan in which insurers would lowball potential payments when claims were filed and fight back vigorously if policyholders refused to acquiesce. Exposed in\u00a0Bloomberg Markets<\/a>, the nature of the McKinsey report tracks perfectly with the\u00a0alleged scheme<\/a>\u00a0that State Farm has been accused of perpetrating in Oklahoma and beyond.<\/p>\n The McKinsey report is the equivalent of the internal documents now being sought by the attorney general in order to prove that State Farm is guilty of racketeering.<\/p>\n Whether the documents will become public \u2014 or whether State Farm will once again settle before trial \u2014 remains to be seen.<\/p>\n State Farm must respond to Drummond\u2019s petition by Dec. 22.<\/p>\n Oklahoma Watch, at\u00a0oklahomawatch.org<\/a>, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.<\/em><\/p>\n<\/div>\n J.C. Hallman \u00a0|\u00a0 Oklahoma Watch Catch up on Oklahoma’s top headlines of the week for Dec. 12, 2025 Here are Oklahoma’s top headlines of the week for Dec. 12, 2025 On Dec. 4, Attorney General Gentner Drummond filed a petition accusing State Farm of violating ORICO,\u00a0Oklahoma\u2019s version\u00a0of the Racketeer Influenced and Corrupt Organizations Act (1970), … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":13963,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-13962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.jubi24.com\/wp-content\/uploads\/2025\/12\/State-Farm-had-been-accused-of-racketeering-before-Oklahoma-petition.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/13962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13962"}],"version-history":[{"count":1,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/13962\/revisions"}],"predecessor-version":[{"id":13964,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/13962\/revisions\/13964"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/media\/13963"}],"wp:attachment":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Insurance industry’s tumultuous legal history<\/h2>\n
RICO flows both ways<\/h2>\n
The McKinsey report<\/h2>\n
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