Bill Text: TX SB1339 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to contractual subrogation rights of certain insurers and benefit plan issuers.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-04-15 - Left pending in committee [SB1339 Detail]
Download: Texas-2013-SB1339-Introduced.html
83R7234 AJA-F | ||
By: Duncan | S.B. No. 1339 |
|
||
|
||
relating to contractual subrogation rights of certain insurers and | ||
benefit plan issuers. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 6, Civil Practice and Remedies Code, is | ||
amended by adding Chapter 140 to read as follows: | ||
CHAPTER 140. CONTRACTUAL SUBROGATION RIGHTS OF PAYORS OF CERTAIN | ||
BENEFITS | ||
Sec. 140.001. DEFINITIONS. In this chapter: | ||
(1) "Covered individual" means an individual entitled | ||
to benefits described by Section 140.002. | ||
(2) "Payor of benefits" or "payor" means an issuer of a | ||
plan providing benefits described by Section 140.002 who: | ||
(A) pays benefits to or on behalf of a covered | ||
individual as a result of personal injuries to the covered | ||
individual caused by the tortious conduct of a third party; and | ||
(B) has a contractual right of subrogation | ||
described by Section 140.004. | ||
Sec. 140.002. APPLICABILITY OF CHAPTER. (a) This chapter | ||
applies to an issuer of a health benefit plan that provides benefits | ||
for medical or surgical expenses incurred as a result of a health | ||
condition, accident, or sickness, a disability benefit plan, or an | ||
employee welfare benefit plan, including an individual, group, | ||
blanket, or franchise insurance policy or insurance agreement, a | ||
group hospital service contract, or an individual or group evidence | ||
of coverage or similar coverage document, including: | ||
(1) an insurance company; | ||
(2) a group hospital service corporation operating | ||
under Chapter 842, Insurance Code; | ||
(3) a fraternal benefit society operating under | ||
Chapter 885, Insurance Code; | ||
(4) a stipulated premium insurance company operating | ||
under Chapter 884, Insurance Code; | ||
(5) a reciprocal exchange operating under Chapter 942, | ||
Insurance Code; | ||
(6) a health maintenance organization operating under | ||
Chapter 843, Insurance Code; | ||
(7) a multiple employer welfare arrangement that holds | ||
a certificate of authority under Chapter 846, Insurance Code; or | ||
(8) an approved nonprofit health corporation that | ||
holds a certificate of authority under Chapter 844, Insurance Code. | ||
(b) Notwithstanding Section 172.014, Local Government Code, | ||
or any other law, this chapter applies to a risk pool providing | ||
health and accident coverage under Chapter 172, Local Government | ||
Code. | ||
(c) Notwithstanding any provision in Chapter 1551, 1575, | ||
1579, or 1601, Insurance Code, or any other law, this chapter | ||
applies to an issuer of: | ||
(1) a basic coverage plan under Chapter 1551, | ||
Insurance Code; | ||
(2) a basic plan under Chapter 1575, Insurance Code; | ||
(3) a primary care coverage plan under Chapter 1579, | ||
Insurance Code; and | ||
(4) basic coverage under Chapter 1601, Insurance Code. | ||
(d) Notwithstanding any other law, this chapter applies to | ||
any self-funded issuer of a plan that provides a benefit described | ||
by Subsection (a). | ||
(e) This chapter applies to any policy, evidence of | ||
coverage, or contract under which a benefit described by Subsection | ||
(a) is provided and: | ||
(1) that is delivered, issued for delivery, or entered | ||
into in this state; or | ||
(2) under which an individual or group in this state is | ||
entitled to benefits. | ||
Sec. 140.003. CONFLICTS WITH OTHER LAW. In the event of a | ||
conflict between this chapter and another law, including a rule of | ||
procedure or evidence, this chapter controls to the extent of the | ||
conflict. | ||
Sec. 140.004. CONTRACTUAL SUBROGATION RIGHTS AUTHORIZED. | ||
An issuer of a plan that provides benefits described by Section | ||
140.002 under which the policy or plan issuer may make payments to | ||
or on behalf of a covered individual as a result of a personal | ||
injury to the individual caused by the tortious conduct of a third | ||
party may contract to be subrogated to and have a right of | ||
reimbursement from the individual's recovery for that injury, | ||
subject to this chapter. | ||
Sec. 140.005. PAYOR'S RECOVERY LIMITED. (a) If an injured | ||
covered individual to whose rights a payor of benefits is | ||
subrogated is not able to realize a complete and adequate recovery | ||
for an injury sustained as a result of the actionable tortious | ||
conduct of a third party, the payor is entitled to recover as | ||
provided by Subsection (b). | ||
(b) Subject to Subsections (c), (d), and (e), a payor's | ||
share under Subsection (a) of a covered individual's recovery is an | ||
amount that is equal to the lesser of: | ||
(1) one-third of the covered individual's total | ||
recovery; or | ||
(2) the total cost of benefits paid by the payor as a | ||
direct result of the tortious conduct of the third party. | ||
(c) A covered individual may bring a declaratory judgment | ||
action to limit the amount of a payor's recovery under this section | ||
to an amount that is less than the amount otherwise payable under | ||
Subsection (b), as provided by Subsections (d) and (e). | ||
(d) If, in an action under Subsection (c), the covered | ||
individual proves by a preponderance of the evidence that the | ||
covered individual's total recovery is less than 50 percent of the | ||
value of the covered person's underlying claim for damages, the | ||
payor's total recovery under this section is limited to an amount | ||
that is not less than 15 percent of and not more than one-third of | ||
the covered individual's total recovery. | ||
(e) If, in an action under Subsection (c), the covered | ||
individual shows by clear and convincing evidence that the payor's | ||
recovery of an amount otherwise payable under this section would | ||
result in a recognized injustice, the payor's total recovery under | ||
this section is limited to an amount that is less than 15 percent of | ||
and equal to or greater than five percent of the covered | ||
individual's total recovery. | ||
(f) A common law doctrine that requires an injured party to | ||
be made whole before a subrogee makes a recovery does not apply to | ||
the recovery of a payor under this section. | ||
Sec. 140.006. ATTORNEY'S FEES IN ACTION TO LIMIT SUBROGEE'S | ||
RECOVERY. Notwithstanding Section 37.009 or any other law, in an | ||
action brought under Section 140.005(c), the court may not award | ||
costs or attorney's fees to any party in the action. | ||
Sec. 140.007. ATTORNEY'S FEES IN THIRD-PARTY ACTION. (a) | ||
Except as provided by Subsection (c), a payor of benefits whose | ||
interest is not actively represented by an attorney in a | ||
third-party action to recover for a personal injury to a covered | ||
individual shall pay to an attorney representing the covered | ||
individual a fee in an amount determined under an agreement entered | ||
into between the attorney and the payor plus a pro rata share of | ||
expenses incurred in connection with the recovery. | ||
(b) Except as provided by Subsection (c), in the absence of | ||
an agreement described by Subsection (a), the court shall award to | ||
the attorney, payable out of the payor's share of the total | ||
recovery, a reasonable fee for recovery of the payor's share, not to | ||
exceed one-third of the payor's recovery. | ||
(c) Notwithstanding Subsection (a) or (b), a payor may not | ||
be assessed out of a recovery limited under Section 140.005(d) or | ||
(e) any attorney's fees under any theory or rule of law, including | ||
the common fund doctrine. | ||
Sec. 140.008. FIRST PARTY RECOVERY. A payor of benefits may | ||
not pursue a recovery against a covered individual's first party | ||
recovery. | ||
Sec. 140.009. CONSTRUCTION OF CHAPTER. Except as provided | ||
by Section 140.005(c), this chapter does not create a cause of | ||
action. | ||
SECTION 2. The change in law made by this Act applies only | ||
to a contractual right of subrogation in: | ||
(1) an insurance policy or evidence of coverage | ||
delivered, issued for delivery, or renewed on or after the | ||
effective date of this Act; or | ||
(2) a contract entered into or renewed on or after the | ||
effective date of this Act. | ||
SECTION 3. This Act takes effect January 1, 2014. |