Bill Text: HI SB2523 | 2012 | Regular Session | Introduced
Bill Title: Workers' Compensation; Subrogation; Premiums
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-23 - (S) Referred to JDL. [SB2523 Detail]
Download: Hawaii-2012-SB2523-Introduced.html
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THE SENATE |
S.B. NO. |
2523 |
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TWENTY-SIXTH LEGISLATURE, 2012 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO WORKERS' COMPENSATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that most motor vehicle insurers do not penalize an insured for losses due to injuries caused by the negligence of third parties. The legislature finds that in workers' compensation claims, however, insurers will increase an insured's premiums in order to recover claim losses, if the claim is not subrogated against the third party.
The purpose of this Act is to clarify the workers' compensation insurance underwriting procedures with regard to premiums and reserves on subrogated claim recoveries.
SECTION 2. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§386‑ Subrogation; indemnity; reserves; premiums. (a) Pursuant to section 386-8, the employer or insurer of the employer shall have the right to indemnification by the third party or by the liability insurer of the third party for the amount of compensation paid to the injured employee covered under this chapter.
To recover the amount of compensation paid by the employer or insurer of the employer to the employee for injuries covered under this chapter, an employer or the insurer of an employer may exercise subrogation rights against a third party for the wilful or negligent act directed against an employee receiving compensation.
(b) Upon receipt of a notice of injury under section 386‑81, the employer or insurer of the employer shall immediately assess the likelihood of a successful recovery in subrogation against a third person, if any.
(c) If the employer or the insurer of the employer determines from the assessment under subsection (b) that there is a high likelihood of successful recovery in subrogation, the insurer shall set an amount for claim reserve no greater than the estimated net subrogated claim, which shall be calculated by subtracting the amount of subrogated recovery from the total amount of compensation paid; provided that the reserved amount may be changed from time to time as circumstances warrant. The director shall ensure that the amount of claim reserve is not in excess of the estimated net subrogated claim at any one time during the pendency of the claim.
(d) The insurer shall not increase the policy premium on the employer, by reason of the claim, in excess of the estimated net subrogated claim calculated pursuant to subsection (c).
(e) This section shall not prohibit the injured employee from bringing an action against the third party for injuries received because of the negligence or wilful act of the third party; provided that the insurer of the employer shall have a lien as a matter of law against any recovery in the amount of compensation paid."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Workers' Compensation; Subrogation; Premiums
Description:
Allows a workers' compensation insurer to exercise subrogation rights against a third party that causes a compensable injury. Clarifies limits of reserves for the claim. Prohibits premiums from rising on the claim in excess of the estimated net subrogated claim.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
