Arkansas Senate Bill SB350

Arkansas 2023 Regular Session

• Introduced: 3/1/23
• Refer: 3/1/23
• Report Pass: 3/8/23
• Engrossed: 3/9/23
• Refer: 3/9/23
• Failed: 5/1/23

Caption

To Increase The Percentage For Damages On Loss Claims Under An Insurance Policy.

Impact

If passed, SB350 would significantly alter how loss claims are handled under Arkansas law. By increasing the statutory damages for delayed payments, it would potentially reduce the number of disputed claims as insurers may be compelled to expedite settlements to avoid incurring higher penalties. This change could also have a ripple effect on policy premiums and the practices of insurance companies operating within the state, as they adapt to the new financial implications of the legislation.

Summary

Senate Bill 350 aims to modify the percentage of damages that an insurance company must pay on loss claims when they fail to settle the claim within the specified time. The proposed amendment seeks to raise the percentage of damages from twelve percent (12%) to twenty-five percent (25%). This change is intended to provide a stronger financial incentive for insurance companies to process and pay valid claims in a timely manner, thereby protecting policyholders' rights.

Contention

While the bill may seem beneficial for consumers seeking timely compensation after losses, there are concerns among some stakeholders regarding the increased financial burden placed on insurance companies. Opponents argue that this legislation could lead to higher premiums for policyholders as insurers might adjust rates to mitigate the risks associated with increased liability for delayed payments. The debates around this bill might also touch on broader issues of consumer protection versus the sustainability of the insurance industry in Arkansas.