Texas House Bill HB1869

Texas 2013 - 83rd Regular

Caption

Relating to contractual subrogation and other recovery rights of certain insurers and benefit plan issuers.

Impact

By allowing for more explicit contractual subrogation rights, HB1869 could potentially lead to increased efficiency in the handling of claims where multiple parties are involved. Payors of benefits can now more reliably seek reimbursement from third parties when they have incurred costs due to an individual's injuries caused by such parties. This is expected to enhance the ability of insurers to manage their liabilities, which may influence the overall costs of insurance premiums for consumers in Texas.

Summary

House Bill 1869 aims to modify the laws concerning contractual subrogation and recovery rights for insurers and benefit plan issuers in Texas. The bill introduces Chapter 140 to the Civil Practice and Remedies Code, addressing situations where insurers and payors, who issue health benefit plans, can pursue recovery from third-party tortfeasors responsible for injuries to covered individuals. This legislation seeks to clarify and streamline the subrogation process, giving payors clear rights to recover benefits paid out when injuries are caused by the negligence of others.

Contention

While the bill has been generally supported for its potential to reduce litigation costs and enhance the recovery mechanisms for insurers, there are concerns regarding how these changes might affect consumers. Critics argue that increased subrogation rights may lead to more aggressive collection practices by insurers against injured parties, particularly in cases involving underinsured or uninsured motorist coverage. The bill explicitly limits the ability of payors to pursue recoveries from first-party coverages, which some may see as a protective measure for consumers; however, the balance between protecting consumer interests and ensuring insurers can effectively recover benefits paid remains a point of debate.