Arizona Senate Bill SB1498

Arizona 2024 Regular Session

• Introduced: 2/6/24

Caption

Insurance; lienholder; third-party liability

Impact

The bill's amendments serve to refine the interactions between employees, their dependents, and insurers when faced with third-party claims. By establishing a timeframe for pursuing claims and outlining the responsibilities for providing notice to insurance carriers, it sets clear expectations for all parties involved. Additionally, the bill addresses potential complications in the enforcement of rights and claims, particularly benefiting insurance carriers by allowing them to recover costs if employees fail to act on their claims. This, in turn, could impact claims management within workers' compensation systems by reducing litigation over unclaimed rights.

Summary

SB1498 seeks to amend Section 23-1023 of the Arizona Revised Statutes, which governs the liability of third parties in cases where employees are injured or killed due to the negligence of someone not in their employ. The bill allows employees or their dependents to pursue remedies against negligent third parties while also ensuring that if they do not take action within a specified time frame, the rights to pursue compensation transfer to the insurance carrier or self-insured employer. This provides a structured process for claims related to workplace injuries exacerbated by third-party negligence, enhancing clarity in the workers' compensation landscape.

Contention

While the bill may streamline processes related to third-party claims in workers' compensation, it also raises points of contention around employee rights. Critics might argue that the assignment of rights to insurance carriers under certain conditions could undermine employee autonomy in seeking justice. Moreover, the provision limiting the ability for employees to negotiate settlements without the insurer's approval has implications for how much control they have over their compensation processes. The need for written notice and intervention rights for insurers could also provoke debate about balancing employee interests against insurance company rights.