HB1381
Concerning An Insurer's Right To Subrogation And Reimbursement For Medical And Hospital Benefits.
Last Action (Feb. 3, 2025): WITHDRAWN BY AUTHOR
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AI-Generated Summary
House Bill 1381 amends Arkansas Code § 23-89-207 regarding an insurer's right to subrogation and reimbursement for medical and hospital benefits paid under automobile insurance policies. The bill clarifies that insurers have a right of reimbursement and a lien on tort recoveries obtained by an injured party, provided that the benefits are limited to the aggregate $5,000 required by § 23-89-202(1). It establishes that if an injured party does not pursue a liable third party, the insurer may exercise a right of subrogation. The bill also mandates that collection costs be shared between the insurer and the insured proportional to their respective benefits from the recovery. Furthermore, it prohibits an insurance company representing a liable party from requiring that settlement or judgment checks be made out jointly to both the injured party and their own insurer. Finally, the bill explicitly states that the 'made whole' doctrine does not apply to these insurer reimbursements and clarifies that the act does not affect Arkansas Workers' Compensation Law.
Potential Impact Analysis
Who Might Benefit?
Insurance companies are the primary beneficiaries, as the bill explicitly codifies their right to reimbursement and subrogation for the first $5,000 of medical benefits paid, while also confirming that they are not subject to the 'made whole' common law doctrine. This strengthens their ability to recoup costs from tort settlements or judgments.
Who Might Suffer?
Injured individuals who receive medical payments from their own insurance are negatively impacted, as the bill ensures their insurers can claim a portion of any legal settlement or judgment they receive, regardless of whether the individual has been 'made whole' by that recovery. Additionally, plaintiffs may face greater administrative complexity in managing settlement disbursements, though the bill protects them from mandatory joint-check requirements.
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