Arbitration Awards and Intervention in Court Proceedings for Insurance Companies– H.B. 345

| January 23, 2023

Provides that any arbitration award for personal injury, bodily injury,

Provides that any arbitration award for personal injury, bodily injury, or death or any judgment or decree entered on an arbitration award for personal injury, bodily injury, or death shall not be enforceable against insurers unless the insurer has agreed in writing to the arbitration proceeding or agreement. Unless otherwise required by contract, an insurer’s election to not participate in arbitration shall not constitute bad faith. These provisions shall not apply to any arbitration awards for personal injury, bodily injury, or death or any judgment or decree entered on an arbitration award for personal injury, bodily injury, or death, arising out of an arbitration agreement preceding the date of injury or loss.

Specifies that a person having an unliquidated claim for damages against a tort-feasor may enter into a contract with the tort-feasor if the person’s insurer has refused to withdraw a reservation of rights or declined coverage for such unliquidated claim. The bill specifies what happens if there is any action seeking a judgment on a claim against a tort-feasor at the time of the execution of any contract between the two parties, what happens if there is a pending action at the time of the execution of a contract but the action is subsequently dismissed, and what happens if there is no action seeking judgment on a claim at the time of the execution of any contract between the two parties. Any insurer who receives notice under this section will have the unconditional right to intervene in any pending civil action involving the claim for damages within 30 days after receipt of the notice and insurers intervening in a court proceeding where the defendant has contracted to limit his or her liability to specified assets shall have all the same rights as are afforded to defendants. These provisions shall not alter or reduce an intervening insurer’s obligations to any insureds other than the tort-feasor, including any co-insureds. All terms of a covenant not to execute or any terms of any contract to limit recovery to specified assets must be in writing and signed by the parties to the covenant or contract. No unwritten terms of any covenant or contract under this section will be enforceable against any party to the covenant or contract or any other person or entity. In any action asserting bad faith by the insurer, any agreement between the tort-feasor and the insured will be admissible in evidence. The exercise of any rights under this section will not be construed to be bad faith.

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