Key Takeaways
- The 15% Interest Rule Exists for a Reason: Oklahoma law can add 15% annual interest to certain covered insurance judgments. That rule makes delay more expensive when an insurer wrongly withholds money.
- SB 726 Would Have Removed Property Claims: A bill reportedly requested by State Farm sought to exempt property insurance from that interest provision, reducing a key pressure point in storm, fire, and homeowner disputes.
- The Bill Failed 72-18: Oklahoma legislators rejected the measure after floor questions about who requested it. The episode matters because insurance-law changes can alter claim leverage long before a policyholder ever goes to court.
In May 2025, something unusual happened on the Oklahoma House floor. As reported by Oklahoma Watch, Rep. Mark Tedford, R-Tulsa, was presenting Senate Bill 726 when a colleague asked a simple question: "May I ask who requested this?" Tedford's answer—"This is a State Farm request bill"—brought the legislative process into sharp focus. One of Oklahoma's biggest homeowner insurers was asking legislators to narrow a statutory interest rule that can make claim-delay litigation more expensive for insurers. The bill failed decisively. But the episode illustrates a larger truth: insurance companies do not just fight individual claims. They also fight over the laws that shape policyholder leverage.
What SB 726 Would Have Done
To understand what was at stake, you need to understand Oklahoma's bad faith framework.
When an insurance company acts in bad faith — unreasonably denying or delaying a legitimate claim — Oklahoma recognizes a common-law bad-faith claim based on the insurer's duty of good faith and fair dealing. Separately, 36 O.S. § 3629(B) can provide attorney fees and 15% annual interest to a prevailing insured in certain covered insurance disputes, calculated from the date the loss was payable. This is not a universal bad-faith remedy across every insurance line.
This interest provision serves a critical purpose: it makes delay expensive. Without it, insurance companies could drag out litigation for years, holding onto money that rightfully belongs to policyholders while claimants struggle. The 15% interest ensures that delay has a cost.
SB 726 sought to exempt property insurance claims from this interest provision.
In practical terms, that means homeowners litigating covered property losses after storm damage, fire, or other losses would lose an interest remedy that can make delay expensive. Insurance companies would still face ordinary contract and bad-faith exposure where proven, but one statutory pressure point would be gone.
Why Property Claims?
Rep. Tedford argued that property insurance disputes were typically about settlement amounts, not outright refusals to pay. The implication: these cases don't need the same protections.
But this characterization obscures reality. Many homeowners face exactly the kind of delay and denial the interest rule was designed to address. They submit legitimate claims after tornadoes, hailstorms, or fires. Their insurer lowballs the estimate, denies coverage based on dubious policy interpretations, or simply fails to respond within required timeframes.
Oklahoma Watch's reporting noted litigation allegations that State Farm "routinely ignores deadlines." Those are allegations, and State Farm has disputed bad-faith claims in other contexts. But the policy question is straightforward: if a rule makes unreasonable delay more expensive, removing that rule changes incentives.
The geographic implications were also troubling. As Rep. Emily Gise, R-Oklahoma City, pointed out during floor debate: "How does that help our constituents, especially mine in tornado alley or Speaker Hilbert's with the fire damage?" Oklahoma homeowners face some of the most severe weather in the country. Property insurance isn't a luxury; it's essential. And the mechanisms that ensure fair treatment matter enormously.
The Vote That Killed It
SB 726 passed the Oklahoma Senate 40-7. But the House saw through it.
The final vote was 72-18 against—a resounding rejection. Oklahoma Watch reported that several representatives initially voted yes but changed their votes in the final seconds when the outcome became clear. The disclosure that State Farm had requested the bill appears to have been decisive.
Rep. Jim Olsen, R-Roland, recalled thinking: "Why are we going to exempt them?" Rep. Daniel Pae, R-Lawton, said he "could not figure out what the answer was for this bill."
Rep. Michelle McCane, D-Tulsa, summarized the bipartisan skepticism: "I am always a little bit cautious when we are receiving bills from a business. I didn't see a need for it, and I didn't have any rationale to explain a yes vote."
The Florida Cautionary Tale
Supporters of insurer-friendly reforms often point to states that changed insurance litigation rules and later saw premium movement. Florida is the usual example, where Governor Ron DeSantis signed sweeping insurance and tort changes in 2022 and 2023.
But the data tells a different story.
A report from Weiss Ratings—the nation's only independent rating agency covering insurance companies—found that after Florida's tort reforms:
- Total lawsuits increased 24%
- Complete claim denials rose 17%
Premiums may move for many reasons, including reinsurance costs, catastrophe risk, market withdrawals, regulation, and claim-payment rules. The policyholder concern is narrower: when reforms reduce fee, interest, or bad-faith exposure, insurers may have less financial reason to resolve close claims promptly.
Weiss Ratings founder Martin Weiss didn't mince words: "Insurers abuse their own customers, blame their own customers, and then try to get legislatures to protect them from their own customers' ire."
The Florida experience is not a perfect comparison to Oklahoma. But it shows why policyholders should ask exactly what a bill changes, who benefits, and what enforcement tool disappears.
What This Means for Your Claims
If you're an Oklahoma policyholder, the defeat of SB 726 is good news—but it's also a reminder of what you're up against.
Insurance companies don't just fight claims at the adjustment stage. They fight at the litigation stage. And they fight at the legislative stage, seeking to reshape the rules to their advantage.
The protections that exist in Oklahoma law—like statutory interest in covered disputes, the common-law right to sue for bad faith, and the requirement that insurers act in good faith—didn't appear by accident. They exist because policyholders need leverage against companies with vastly more resources.
When you pay premiums for years and then face a claim denial, these protections matter. They're the reason insurance companies can't simply ignore deadlines, lowball indefinitely, or fight every claim to the bitter end without consequence.
The Ongoing Battle
SB 726 failed, but the fight isn't over. As Oklahoma Watch reported, a "slew of new insurance laws" had been proposed for the 2026 legislative session. While Rep. Tedford assured reporters that none of his then-current bills originated with State Farm, he acknowledged that some language might come from insurance industry groups like the National Association of Mutual Insurance Companies.
For policyholders, vigilance is required. The same interests that sought to remove property claims from the 15% interest rule may continue seeking other ways to limit accountability.
The issue did not end with SB 726. In June 2026, Oklahoma Attorney General Gentner Drummond filed a lawsuit accusing State Farm of bad-faith claim handling through a program called Hail Focus. Those allegations still have to be proven in court, and State Farm has publicly denied wrongdoing. But the lawsuit shows the same policy fight from another angle: whether Oklahoma homeowners can force a large insurer to handle storm claims fairly.
If You're Facing a Denied Claim
Understanding the legislative landscape helps you recognize what's at stake. But if you're currently fighting a denied or delayed insurance claim, here's what matters:
Know your rights. Oklahoma law requires insurers to act in good faith. If they're not—if they're delaying, denying without legitimate reason, or failing to properly investigate—you may have a bad faith claim.
Don't accept the first offer if it's inadequate. Lowball offers are a negotiating tactic. You're not required to accept them.
Document everything. Keep records of every communication, every deadline, every promise made and broken. This documentation becomes evidence if litigation is necessary.
Understand the stakes. If you sue and qualify as a prevailing insured in a covered dispute, the 15% interest rule may matter. If you prove bad faith, separate tort remedies may also be available. The details depend on the policy, claim type, and evidence.
For a complete guide to Oklahoma's bad faith framework, see our insurance bad faith practice area or our article on insurance bad faith claims.
Frequently Asked Questions
What is the 15% interest provision under 36 O.S. § 3629(B)?
Section 3629(B) provides for 15% annual interest on certain covered insurance judgments when the insured is the prevailing party, calculated from when the loss was payable. It is separate from Oklahoma's common-law bad-faith claim. The bad-faith claim comes from the insurer's duty of good faith and fair dealing, not from Section 3629 alone.
Does this interest rule apply to all insurance claims?
No. The statute has exclusions and line-specific limits. Uninsured motorist claims are already treated differently. SB 726 attempted to add property insurance to the exemption. The bill failed, so property claims were not removed from the rule.
Why would insurers want to remove this interest rule?
The interest rule makes delay more costly in covered disputes. Without it, an insurer may face less financial consequence for stretching out a property-claim fight, especially when the amount owed was payable much earlier.
How common are bad faith insurance denials in Oklahoma?
Bad-faith allegations are common enough that Oklahoma courts and regulators see them regularly, but each case turns on its own claim file. In June 2026, Attorney General Gentner Drummond filed a public enforcement lawsuit alleging State Farm used Hail Focus to reduce homeowner payouts; State Farm has denied wrongdoing. For more on how insurers undervalue claims, see our guide on delay, deny, defend tactics.
What should I do if my claim is being delayed or denied?
Document all communications, meet all deadlines on your end, and consider consulting an attorney. Bad faith claims have specific legal requirements, and early guidance helps protect your rights.
Will there be more attempts to weaken policyholder protections?
Likely. Insurance industry lobbying is persistent, and consumer-protection rules often change through technical bills that do not draw much public attention. Staying informed about legislative developments helps protect these rights for all Oklahomans.
The defeat of SB 726 shows why source and wording matter in insurance bills. A narrow amendment can change the economics of a claim dispute. Policyholders need disclosure, scrutiny, and legislators willing to ask who benefits.
At Addison Law, we represent policyholders against insurance companies that deny, delay, and defend legitimate claims. We understand the tactics insurers use—at the claims stage, in litigation, and in the legislature. If you're facing a denied or delayed claim, contact us for a free consultation.
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