A bill for an act relating to the duties of insurers under medical malpractice insurance policies.

Senate

File

13

-

Introduced

SENATE

FILE

13

BY

LOFGREN

A

BILL

FOR

An

Act

relating

to

the

duties

of

insurers

under

medical

1

malpractice

insurance

policies.

2

BE

IT

ENACTED

BY

THE

GENERAL

ASSEMBLY

OF

THE

STATE

OF

IOWA:

3

TLSB

1301XS

(2)

91

nls/ko

S.F.

13

Section

1.

NEW

SECTION

.

507B.4D

Medical

malpractice

policy

1

limit

——

insurer

liability.

2

An

insurance

company

insuring

a

health

care

provider,

as

3

defined

in

section

135P.1,

against

professional

negligence

4

shall

at

all

times

negotiate

in

good

faith

all

claims

presented

5

to

the

provider.

If

a

claimant

offers

to

settle

a

claim

6

within

the

professional

negligence

insurance

policy

coverage

7

limits

and

the

insurance

company

refuses

or

declines

the

8

offer

and

the

claim

proceeds

to

judgment

in

excess

of

the

9

insurance

policy

coverage

limits,

the

insurance

company

shall

10

be

liable

for

the

full

amount

of

the

judgment

regardless

11

of

the

existing

insurance

policy

coverage

limitation.

The

12

insurance

company

has

a

duty

to

negotiate

a

settlement

within

13

the

policy

limits

if

an

offer

is

made

by

a

claimant

at

or

14

within

the

policy

limits.

If

the

insurance

company

does

not

15

do

so,

the

health

care

provider

shall

have

a

cause

of

action

16

against

the

insurance

company

for

the

failure

to

negotiate

a

17

settlement

within

the

policy

limits.

The

damages

shall

include

18

the

recovery

of

all

costs

the

health

care

provider

incurs

and

19

reasonable

attorney

fees.

20

EXPLANATION

21

The

inclusion

of

this

explanation

does

not

constitute

agreement

with

22

the

explanation’s

substance

by

the

members

of

the

general

assembly.

23

This

bill

provides

that

an

insurance

company

insuring

a

24

health

care

provider

against

professional

negligence

shall

25

negotiate

in

good

faith

all

claims

presented

to

the

provider.

26

If

a

claimant

offers

to

settle

within

the

policy

limits

and

the

27

insurer

refuses

or

declines

the

offer

and

the

claim

proceeds

to

28

judgment

in

excess

of

the

policy

limit,

the

insurance

company

29

is

liable

for

the

full

amount

regardless

of

policy

limitation.

30

The

insurance

company

has

a

duty

to

negotiate

a

settlement

31

within

policy

limits

if

an

offer

has

been

made

by

the

claimant

32

at

or

within

the

policy

limits.

If

the

insurance

company

33

fails

to

do

so,

the

health

care

provider

has

a

cause

of

action

34

against

the

insurance

company.

35

-1-

LSB

1301XS

(2)

91

nls/ko

1/

1