S.B. 74 Motor Vehicle Civil Action Amendments: transcript

to two, uh, number three, Senate Bill 74 seat Belt, civil Action Amendments Representative Musselman. Um, Mr. Chair, I'll be speaking, uh, solely to sub two, which is substantially different from the first rendition of this bill. So if I could get, uh, it's up to you, Mr. Chair, if you'd like to move that or move that during committee action, but I will speak ex Explicitly, um, to Senator Balderree.

Thank you. I just want to explain really quick the, the major difference between the first, uh, rendition and the sub. Because the bill addresses procedural insurance reform, the seatbelt issue raises a broader evidentiary and, and comparative fault, um, questions keeping the bill focused allows meaningful progress while leaving the broader tort reform discussions for separate considerations. So let me give you just kind of a quick, um, reasoning behind the bill as it stands before you now. And that is, uh, often we have individuals up here running bills and or defending, uh, the insurance companies. And we have bills that are up here. I suppose you could, maybe I shouldn't say defending form behalf of trial attorneys. This bill is explicitly formed behalf of those that are insured in that circumstance where they potentially may be in the un unenviable position of being sued. So with that, i I, the bill requires clear standards for timeline, uh, time limited demand letters. Um, uh, uh, the, the demand has to be put in writing, has to be, uh, clearly labeled for time limited demand reference. The statutory section provide material terms, including a 4 45 day response window. Uh, clear offer offered to settle the policy limits offered a full, a full release date, location of the loss, claim number, description of injuries, and reasonable proof of injury. Um, this, and there's also a, a, a tolling person portion in here to prevent artificial deadlines. Um, requires insurance, insurance transparency to the insured. So if the insurer must disclose in writing, whether it will defend, whether it will indemnify, and whether it, uh, ident indemnification is limited to the policy limits itself. Um, and, and overall, it still preserves that bad faith protection, which, um, the bill explicitly, uh, state it does not limit an insurer's duty of good faith or eliminated insurer's remedies for failure to accept reasonable policy limits offers. Um, and full disclosure to the committee, I do have, uh, I am working on some changes to the language, um, with both the insurance company and the trial attorneys. We, we haven't quite landed that yet. Um, so if we do, the Angels will sing and, and praise, because I've got two worlds to, to agree on something that otherwise you would think are impossible. But we are very close. But for the most part, everybody's, um, has some reservations in the, uh, what's presented before you now, but, um, it's very close. So with that, Mr. Chair, that's my presentation.

Thank you, Mr. Chair. Um, we've been working over the weekend trying to get close on language, and we got pretty close on language and where the direction's going to help solve some of the abuses for the letters that our insureds get before. Do, do you have a name, sir? Yes. Michael Sontag. Okay. A PCA. Do you represent any organizations, American property? Yes. Is this your first time testifying? I should know better. Thank you, Mr. Chair. Um, so we're, we're really close on agreement and maybe the, you know, we're grudgingly going along in some things and in getting maybe some better protection on our shirts on the front end. So with that, we support the bill. Alright. Thank you, Mr. Sontag, if that is your name.

Hi, good morning, Mr. Chair. And, uh, thank you for the opportunity to speak. My name is Russ Hymes and I'm here on behalf of, uh, the Utah Association for Justice. Uh, and, uh, we, first of all, I want to express gratitude to Senator Musselman, um, who's, who sat down with me on multiple occasions, listened to our concerns, um, and is really making significant efforts to try and address them. And, and we're appreciative of that. Um, there are still some challenges that we have with respect to the second substitute of some, uh, some, uh, circumstances that are inadvertently left out. Um, that can create some challenges when you have multiple people who are injured. Um, multiple at-fault vehicles, multiple insurance policies that might come into play, um, or instances with self-insured drivers, um, and some language that, um, from our perspective might appear somewhat contradictory. With that being said, um, like Senator Musselman said, we've been working with the insurance industry to try and get those things corrected with an additional sub and, uh, are appreciative of the senator's willingness to continue to do that.

Yes. My name is Matt Child. I live in Washington County. I represent the Utah Independent Insurance agents, and, uh, we do support this bill as well. We appreciate Senator Musselman's efforts to, um, make things a little more clear in the event that something like this occurs, notification and things of that nature are taken care of in a timely fashion. So we do support the bill.

I, I Thank you, Mr. Chair. I'd move that we favorably recommend SB 74 second substitute.

Yeah, I, I will be a yes on, on this. I, I do think it's interesting on the seat belt stuff. I, I, uh, I have my own thoughts on whether we should have the seat belts as a defense. I, I generally prefer that, but, uh, but that's not the law now. Um, I've got a little bit of concern on the prescriptive nature of the letter, but I think that I trust Senator Musselman to continue to work through that. And so with that, I will be a yes. Thanks.

Thank you. Thank you Madam Chair. Um, I was thinking he was going first so I didn't have it up. One quick second here, if you're ready. I'm ready.

SB seven four is a transparency, transparency and fairness bill, uh, dealing with motor vehicle liability claims, specifically on how, um, uh, policy limit demands are handled and how insured drivers are notified when they may face, um, XX exposure. What it doesn't do, it doesn't change cover, it doesn't eliminate bad faith and it does not create a new cause of action. That's, I think, sometimes when we see these bills, we think that this is purely a policy guardrail bill. That's it. Um, so first, what happens when you, you, you know, you're, you've been in an accident and, and somebody's going to file a claim against you. If a claimant sends a policy limit demand letter to your insurance carrier, um, the demand must include reasonable and sufficient information to evaluate the claim that that includes the description of the in incident injuries liability basis and the medical bills and or other records. And must give at least 30 days time for response or a, a, a time for response. And then second, and this is if the insurer or the claimant decides to contact the insured directly instead of going through the insurance, um, representative if the insurer declines to tender the policy. So the insurer said, we're not gonna settle, and the claimant choose to correspond directly with an unrepresented insurer, meaning the, you know, the rank and file us, uh, meaning a Utah driver who does not have a personal counsel, the bill requires clear written notice and the correspondence must be copied to the insurer. So whatever you're getting your insurance company's getting, explain the claim in plain language and that's the key to this plain language. So if you're, if you're in that circumstance, you completely understand, you can read it and understand it, include the prior demand letter and disclose the claimant's interest, uh, are adverse. And that if, if that circumstance take place, then it's 45 days before they can file a lawsuit if they go that route, then third, kind of a follow up or a kind of enclosure to it. When the insurer receives the, that correspondence, it must provide the written disclosure to the insured. So the insured is, they're saying, we're not gonna settle. You've got the, you've been notified that there's a potential lawsuit. Now the insurer must tell you whether or not it, it, it will defend you whether or not it will indemnify you. And whether the indemnification is limited to policy limits, are they gonna indemnify you fully or are they gonna indemnify you in the policy limits? If indemnification is limited, the insurer must explain why and notify the insured, meaning us rank and file persons or Utah drivers of the right to seek independent counsel on that circumstance. So that's what the bill does. It's purely a guard rail process bill. Um, as by way of, uh, follow up to how we landed at the language that you currently see in third sub, this is one of those moments where a rare circumstance, especially given our, our environment up here where the trial attorneys and insurance companies agree. So I know that's odd to hear me say that, but that is true in this bill. So I think I heard the Heavenly Choir sing when you Yeah, angels just sing. Alright. We should write it on a calendar somewhere. Yes. We need to document this moment. Does that conclude your presentation? It does. Thank you. Awesome. Thank you.

I'll make a motion that we favorably recommend third substitute SB 74 outta this committee.

I think the sponsor did a good job. I'll waive

I'll waive. Thank you Madam Chair.

Represent. Sorry. Representative Abbott. Yes. Acton? Yes. Er Gracious Lube. Yes. Manga? Yes. Millard? Yes. Thompson? Yes. Clancy? Yes. Libe? Yes. That passes unanimously.

uh, SB 74 second substitute and replace it with SB 74 third substitute.

Yeah. Thanks Mr. President. The substitute clarifies procedural requirements around policy limit demand letters, which is the same thing that the sub two did in addition to correspondence with unrepresented insurers and ensure disclosure obligations. This is just done in negotiations with trial attorneys and with the insurance companies in language that they could agree to. Um, it does effectively the same thing, but agree more agreed upon language.

Um, I actually said in there that it does affect the same thing. It, it does effectively the same thing in, in total scope, but it, it's far more directed in its approach. Um, in motor vehicle cases, when some, uh, when we sometimes see time limit policy, uh, demands sent to the insurance companies, these demands, uh, can create high pressure situations. If you've ever been sued, you'd know both from insurers and from everyday Utah. Drivers who may not even know what's happening behind the scenes, the bill does three things. First, it establishes that if someone makes a policy, uh, limit demand, the demand should include reasonable, sufficient, sufficient information to evaluate the claim, like medical records, bills, description of the injuries, and give at least 30 days to respond. That's not a radical timeline, that's just a basic fairness. Second, if the insured declines limits and the claimant chooses to contact an unrepresented insured directly, so instead of going through the insurance company, they're going right to the insured. The claimant must provide clear written notice, explain the claim, and, uh, claim in plain language and disclose, uh, uh, adversity and wait for 45 days before filing the suit that protects Utah drivers from being blindsided. That's only if they that 45 8 days only if they contact the insured directly instead of going through the insurance company. Third, the insurer must disclose to its insured whether it intends to defend or indemnify. So we're at that point where it's not going to settle, it's going to go to court. And whether indemnification is capped at policy limits, if limited, the insurer must explain why and notify the insured of the right to independent counsel. So importantly, some, when we first started out with this, this had the seatbelt issue that's out, that's out with the first sub. Um, we changed it into this vein of kind of communication and making sure the timelines work better in that process. This clarifies that further. With that Mr. President,

Thank you Mr. President. In motor vehicle cases we sometimes see time limit policy demands sent to insurance carriers. These demands can create high pressure situations both for the insurer and for everyday Utah drivers who may not even know what's happening in those cases, it does three things. I'll simplify. It establishes that if someone makes the policy limit demand, the demand should include reasonable sufficient information to evaluate the claim, medical records, uh, description of the injuries, so on and so forth. Second, if the insurer declines the limits and the claimant chooses to contact the unrepresented insured directly instead of through the insurance company, it must provide clear written notice, explain the claim in plain language and disclose adversity and then wait 45 days that protects Utah dryers from being blindsided. Then third and last, the insurer must disclose to the insured whether it tends to defend or indemnify, um, and whether I'll keep going and whether the ident indemnification is capped at policy limits. If limited, the insurer must explain why and notify the insured of the right to independent counsel. Importantly, um, the bill does not expand coverage. Um, it does not create new cause of action. Does not eliminate the bad faith remedies and express the preserve the existing common law. I'm out of things to say. So that concludes my presentation, Mr. President.

Thank you Mr. President. Uh, motion to, uh, reconsider our actions on SB 2 48. We have a motion to reconsider our actions having voted on the prevailing side. Is that correct? Having voted on the prevailing side. Thank you. On Senate Bill two, excuse me. 2 48 Childcare Expansion Act. Correct. Senator? Correct. Mr. President, thank you.

Madam Reading Clerk third Substitute Senate Bill 74 Motor Vehicle Civil Action Amendments by Senator Musselman. This bill will served in judiciary with the vote. 10 0 1. The House sponsors Representative Loubet.

Thank you Mr. Speaker. This bill, SB 74, is a bill that deals about transparency and fairness with motor vehicle liability claims. So this does not make the bill more for one side than the other, but this is Bill is focused on, is on the procedure of how a claimant is able to communicate with an insured and what those requirements are. So this bill will have, uh, requirements that it shows that when somebody, a claimant is reaching out to insurance company, what that, uh, claim has to information that claim has to provide it then also has a timeline in which the insurance company has to respond by. Uh, and then also then talks about what the process is for an insurance company being able to talk with an, uh, an uninsured, uh, insured. And then it also has, um, uh, other, uh, procedural timelines and guardrails put into place to make sure that each individual has their rights being respected. Throughout this process, insurance companies and personal injury attorneys have been involved in this process with the sponsor and everybody came to an agreement on, on this. And so I think the bill caught to a good place where all the parties felt like their, um, rights were, were, um, being preserved. So with that, that concludes my presentation and I'm available for any questions.

Thank you Mr. Speaker. I move to UNC Encircle, Senate Bill 3 21. That motion is in order.