Oklahoma 2025 Regular Session

Oklahoma House Bill HB2144 Compare Versions

Version 1 (Old)

Version 2 (New)

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3		-	ENGR. H. B. NO. 2144 Page 1 1
	3	+	HB2144 HFLR Page 1
	4	+	BOLD FACE denotes Committee Amendments. 1
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28		-	ENGROSSED HOUSE
29		-	BILL NO. 2144 By: Kannady, Deck, Pae,
30		-	Schreiber, Rosecrants,
31		-	Provenzano, Moore, Harris,
32		-	Miller, Roe, Humphrey,
33		-	Ranson, Townley, Pfeiffer,
34		-	Caldwell (Chad), Cantrell,
35		-	Turner, Marti, George, and
36		-	Manger of the House
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 60th Legislature (2025)
	34	+
	35	+	HOUSE BILL 2144 By: Kannady and Deck of the
	36	+	House
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38	38		and
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40	40		Weaver of the Senate
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	45	+	AS INTRODUCED
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46	47		An Act relating to insurance; creating t he Insurance
47	48		Consumers Protection Act; providing definitions;
48	49		creating a statutory cause of acti on; clarifying
49	50		determination of reasonableness and necessity;
50	51		providing who may bring action; declaring certain
51	52		policy, contract, or plan provisions void; clari fying
52	53		there is no requirement to exhaust administrative
53	54		remedies; directing that claimants are e ntitled to
54	55		trial by jury; clarifying issues of bad faith are
55	56		question of fact; creating a statutory cause of
56	57		action against certain bad faith insurers; clarifyi ng
57	58		duty of good faith and fair dealing is nondelegable;
58	59		providing when a cause of action for bad faith shall
59	60		lie; providing for damages; permitting punitive
60	61		damages; providing categories; directing jury to base
61	62		award on certain factors; limiting certain pu nitive
62	63		damages; clarifying considerations and defenses;
63	64		clarifying that causes of actions in act do not limit
64	65		other actions; providing for codification; and
65	66		providing an effective date.
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70	71		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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72		-	ENGR. H. B. NO. 2144 Page 2 1
	73	+	HB2144 HFLR Page 2
	74	+	BOLD FACE denotes Committee Amendments. 1
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97	99		SECTION 1. NEW LAW A new section of law to be codified
98	100		in the Oklahoma Statut es as Section 1119 of Title 12, unless there
99	101		is created a duplication in numbering, reads as follows:
100	102		This act shall be known and may be cited as the "Insurance
101	103		Consumers Protection Act ".
102	104		SECTION 2. NEW LAW A new section of law to b e codified
103	105		in the Oklahoma Statutes as Section 1119.1 of Title 12, unless there
104	106		is created a duplication in numbering, reads as follows:
105	107		As used in the Insuranc e Consumers Protection Act:
106	108		1. "Bad faith" means conduct of an insurer that violates its
107	109		duty or duties of good faith and fair dealing to a first -party
108	110		claimant or third-party beneficiary by acts including but not
109	111		limited to unreasonably or untimely refus ing to pay or tender the
110	112		proper benefits for a valid claim under the insurance policy. This
111	113		duty of good faith and fair dealing is contained in every insurance
112	114		contract and is a nondelegable duty;
113	115		2. "First-party claimant" means an individual corporation ,
114	116		association, partnership, or other legal entity asserting an
115	117		entitlement to benefits owed dire ctly to or on behalf of an insured
116	118		under an insurance policy. First-party claimants include a public
117	119		entity that has paid a claim for benefits dues to an insur er's
118	120		unreasonable delay or denial of the claim;
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120		-	ENGR. H. B. NO. 2144 Page 3 1
	122	+	HB2144 HFLR Page 3
	123	+	BOLD FACE denotes Committee Amendments. 1
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145	148		3. "Insurance" is a contract whereby one undert akes to
146	149		indemnify another or to pay a specified amount upon determinable
147	150		contingencies;
148	151		4. "Insurer" means every person engaged in the business of
149	152		making, selling, or binding contracts of insurance or indemnity in
150	153		Oklahoma, except for independent insuranc e agents and captive
151	154		insurance agents that market for only one insurer. A nonprofit
152	155		hospital service and medical indemnity corporation is an insurer
153	156		within the meaning of this act. The term insurer does not include
154	157		burial associations;
155	158		5. "Insured" means a person for whom the insurance policy is
156	159		written to protect;
157	160		6. "Issued in this state" refers to every health and disability
158	161		policy, insurance contract, ins urance certificate, and insurance
159	162		agreement existing, offered, issued, delivered, or renewed in the
160	163		State of Oklahoma or providing health or disability benefits to a
161	164		resident or domiciliary of the State of Oklahoma and every employee
162	165		benefit plan covering a resident or domiciliary of the State of
163	166		Oklahoma, whether or not on behalf of an employer loca ted or
164	167		domiciled in Oklahoma, on or after January 1, 2005, notwithstanding
165	168		any contractual or statutory choice -of-law provision to the
166	169		contrary;
167	170
168		-	ENGR. H. B. NO. 2144 Page 4 1
	171	+	HB2144 HFLR Page 4
	172	+	BOLD FACE denotes Committee Amendments. 1
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193	197		7. "Person" means an individual, entity, company, insurer,
194	198		association, organization, society, reciprocal or i nter-insurance
195	199		exchange, partnership, syndicate, business trust, or corporation;
196	200		8. "Prior authorization" or "pre-authorization" means the
197	201		review and approval by the insurer of treatment recommendations from
198	202		a health insurance policyholder 's physician or the review by the
199	203		insured's agent experienced in remedying the type of casualt y or
200	204		damage at issue; and
201	205		9. "Third-party beneficiary" means a person that receiv es
202	206		benefits from a contract between two other parties, one of which is
203	207		an insurer, even though t hey are not a party to the contract .
204	208		SECTION 3. NEW LAW A new section of law to be codified
205	209		in the Oklahoma Statutes as Section 1119.2 of Title 12, unless there
206	210		is created a duplication in numbering, reads as follows:
207	211		A. There is hereby created a statutory cause of action for an
208	212		insured under an insurance po licy, as a first-party claimant, and
209	213		any third-party beneficiary to the contract o f insurance between the
210	214		insurer and insured, to maintain an action in district court or any
211	215		court of competent jurisdiction for the bad faith refusal of or
212	216		untimely pre-authorization of benefits, and for payment of such
213	217		benefits.
214	218		B. Provided, however, the recommended treatment for which pre -
215	219		authorization or payment of benefits is sought shall be rea sonable
216	220		and necessary for the person covered by the insurance policy. The
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218		-	ENGR. H. B. NO. 2144 Page 5 1
	222	+	HB2144 HFLR Page 5
	223	+	BOLD FACE denotes Committee Amendments. 1
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243	248		reasonableness and necessity of the recommended treatment shall be
244	249		determined by a jury.
245	250		C. Either the first-party claimant or third -party beneficiary
246	251		may prosecute a claim for bad faith created by this act.
247	252		D. An insurance policy, insurance contract, or plan that is
248	253		issued in this state shall not contain a provision purporting to
249	254		reserve discretion to the insurer, plan administrator, or claim
250	255		administrator to interpret the terms o f the policy, contract, or
251	256		plan or to determine eligibility for benefits. If an insurance
252	257		policy, contract, or plan contains such a provision, the provision
253	258		is void.
254	259		E. There is no requirement to exhaust any administrative
255	260		remedies with the Oklahoma Insu rance Department before filing an
256	261		action asserting a cause of action for bad faith in a district
257	262		court.
258	263		F. A claimant under this section is entitled to a trial by
259	264		jury.
260	265		G. The issue of bad faith is always a question of fact which
261	266		must be submitted to a j ury pursuant to Section 6 of Article 2 of
262	267		the Oklahoma Constitution.
263	268		SECTION 4. NEW LAW A new section of law to be codified
264	269		in the Oklahoma Statutes as Section 1119.3 of Title 12, unless there
265	270		is created a duplication in numbering, reads as follows:
266	271
267		-	ENGR. H. B. NO. 2144 Page 6 1
	272	+	HB2144 HFLR Page 6
	273	+	BOLD FACE denotes Committee Amendments. 1
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292	298		A. There is hereby created a statutory cause of action against
293	299		an insurer, except pursuant to an insurance policy providing for
294	300		statutory workers' compensation benefits under the Administrative
295	301		Workers' Compensation Act in Title 85A of t he Oklahoma Statutes or
296	302		the Workers' Compensation Code in Title 85 of the Okla homa Statutes,
297	303		if the action or actions of the insurer is in bad faith as defined
298	304		by this act.
299	305		B. There is no requirement to exhaust any administrative
300	306		remedies with the Oklahom a Insurance Department before filing an
301	307		action asserting a cause of action for bad faith in a district
302	308		court.
303	309		C. A claimant under this section is entitled to a trial by
304	310		jury.
305	311		D. The issue of bad faith is always a question of fact which
306	312		must be submitted to a jury.
307	313		E. The duty of good faith and fair dealing is contained in
308	314		every insurance contract and is a nondelegable duty.
309	315		SECTION 5. NEW LAW A new section of law to be codified
310	316		in the Oklahoma Statutes as Section 1119.4 of Title 12, unless there
311	317		is created a duplication in numbering, reads as follows:
312	318		A cause of action for bad faith created by this act shall lie
313	319		if:
314	320		1. The insurer was required under the insurance policy to pay
315	321		the insured's claim;
316	322
317		-	ENGR. H. B. NO. 2144 Page 7 1
	323	+	HB2144 HFLR Page 7
	324	+	BOLD FACE denotes Committee Amendments. 1
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342	349		2. The insurer's refusal to pay the claim was unreasonable or
343	350		untimely under the circumstances related to the claim;
344	351		3. The insurer had no reasonable basis for the refusal, or the
345	352		amount it offered to satisfy the claim was unreasonably low; or
346	353		4. The violation by the insurer of its dut y of good faith and
347	354		fair dealing was the direct cause of the injury sustained by the
348	355		insured.
349	356		SECTION 6. NEW LAW A new section of law to be codified
350	357		in the Oklahoma Statutes as Section 1119.5 of Title 12, unless there
351	358		is created a duplication in numbering, reads as follows:
352	359		A. If the insurer violates its dut y or duties of good faith and
353	360		fair dealing, the amount of damages shall be fixed a s the amount of
354	361		money that will compensate a first -party claimant or third -party
355	362		beneficiary for any loss suffered as a result of the breach of the
356	363		duty of good faith and fair dealing.
357	364		B. In fixing the amount of damages, the jury may consider
358	365		financial losses, emotional distress, embarrassment, loss of
359	366		reputation, and mental pain and suffering.
360	367		C. The jury may award punitive damages for the sake of example
361	368		and by way of punishing the insurer based upon the following
362	369		factors, in accordance with Section 9.1 of Title 23 of the Oklahoma
363	370		Statutes:
364	371		1. The profitability of the misconduct to the insurer;
365	372		2. The duration of the misconduct and any concealment of it;
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367		-	ENGR. H. B. NO. 2144 Page 8 1
	374	+	HB2144 HFLR Page 8
	375	+	BOLD FACE denotes Committee Amendments. 1
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392	400		3. The attitude and conduct of the insurer upon discovery of
393	401		the bad faith action; and
394	402		4. The financial condition of the insurer.
395	403		D. Category I. Where the jury finds by clear and convincing
396	404		evidence that an insurer has recklessly disregarded its duty to deal
397	405		fairly and act in good faith with its insured; the jury, in a
398	406		separate proceeding conducted after the jury has made such finding
399	407		and awarded actual damages, may award punitive damages in a n amount
400	408		not to exceed the greater of:
401	409		1. One Hundred Thousand Dollars ($100,000.00); or
402	410		2. The amount of the actual damages awarded.
403	411		E. Category II. Where the jury finds by clear and convincing
404	412		evidence that:
405	413		1. An insurer has acted intentionally and with malice towards
406	414		others; or
407	415		2. An insurer has intentionally and with mali ce breached its
408	416		duty to deal fairly and act in good faith with its insured.
409	417		The jury, in a separate proceeding conducted after the jury has
410	418		made such finding and awarded actual d amages, may award punitive
411	419		damages in an amount not to exceed the greatest of:
412	420		a. Five Hundred Thousand Dollars ($500,000.00),
413	421		b. twice the amount of actual dam ages awarded, or
414	422
415		-	ENGR. H. B. NO. 2144 Page 9 1
	423	+	HB2144 HFLR Page 9
	424	+	BOLD FACE denotes Committee Amendments. 1
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440	449		c. the increased financial benefit derived by the insurer
441	450		as a direct result of the conduct causing the injury
442	451		to the plaintiff and other persons or entities .
443	452		F. Category III. Where the jury finds by clear and convincing
444	453		evidence that:
445	454		1. An insurer has acted intentionally and with malice towards
446	455		others; or
447	456		2. An insurer has intentionally and with malice breached its
448	457		duty to deal fairly and act in good faith with its insured, and the
449	458		court finds, on the record and out of the presence of the jury, that
450	459		there is evidence beyond a reasonable doubt that the insurer acted
451	460		intentionally and with malice and engaged in conduct life -
452	461		threatening to humans, the jury, in a separate proceeding conducted
453	462		after the jury has made such finding and awarde d actual damages, may
454	463		award punitive damages in any amount the jury deems appropriate,
455	464		without regard to the limitations set forth in subsections B and C
456	465		of this section. Any award of punitive damages under this
457	466		subsection awarded in any manner other than as required in this
458	467		subsection shall be void and reversible error.
459	468		G. In determining the amoun t, if any, of punitive damages to be
460	469		awarded under either subsection B, C, or D of this section, the jury
461	470		shall make the award based upon the factors set forth in subsection
462	471		A of this section.
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464		-	ENGR. H. B. NO. 2144 Page 10 1
	473	+	HB2144 HFLR Page 10
	474	+	BOLD FACE denotes Committee Amendments. 1
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489	499		H. Any award of punitive damages under this section awarded in
490	500		any manner other than as required in this section shall be void and
491	501		reversible error.
492	502		SECTION 7. NEW LAW A new section of law to be cod ified
493	503		in the Oklahoma Statutes as Section 1119.6 of Title 12, unless there
494	504		is created a duplicat ion in numbering, reads as follows:
495	505		A cause of action for bad faith as provide d for by this act
496	506		requires analysis of the insurer 's action and not the interpreta tion
497	507		of any health insurance plan or how a health insurance plan relates
498	508		to the claim. Any insurance contract issued in this state that
499	509		offers health insurance benefits shall not contain a provision
500	510		purporting to reserve discretion to the insurer to inter pret the
501	511		terms of the contract . If an insurance contract contains such a
502	512		provision, the provisi on is void. The interpretation of a health
503	513		insurance plan shall not be a defe nse to a bad faith cause of
504	514		action.
505	515		SECTION 8. NEW LAW A n ew section of law to be codified
506	516		in the Oklahoma Statutes as Section 1119.7 of Title 12, unless there
507	517		is created a duplication in numbering, reads as follows:
508	518		The causes of actions authorized in this act are in addition to,
509	519		and do not limit or affect, othe r actions available by statute or
510	520		common law, now or in the future . The statutory causes of act ion
511	521		created by this act are in addition to the common law bad faith
512	522		causes of action and in no way limit remedies or rights established
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514		-	ENGR. H. B. NO. 2144 Page 11 1
	524	+	HB2144 HFLR Page 11
	525	+	BOLD FACE denotes Committee Amendments. 1
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539	550		by common law for the ca use of action for breach of the duty of good
540	551		faith and fair dealing under Oklahoma law.
541	552		SECTION 9. This act shall become effective November 1, 2025.
542		-	Passed the House of Representatives the 13th day of March, 2025.
543	553
544		-
545		-
546		-
547		-	Presiding Officer of the House
548		-	of Representatives
549		-
550		-
551		-
552		-	Passed the Senate the _____ day of __________, 2025.
553		-
554		-
555		-
556		-
557		-	Presiding Officer of the Senate
	554	+	COMMITTEE REPORT BY: COMMITTEE ON JUDICIARY AND PUBLIC SAFETY
	555	+	OVERSIGHT, dated 03/04/2025 - DO PASS, As Coauthored.