Relating to the award of damages in a private action involving health benefits for certain prohibited acts or practices by an insurer.
The implications of HB 2620 are significant, as it changes the landscape for litigation against insurers concerning health benefits. By allowing for greater potential recovery, the bill is expected to encourage more individuals to pursue legal actions when they believe they have been wronged by an insurance provider. This could lead to increased accountability for insurers and promote fairer practices in the industry, as they may be more inclined to comply with regulations to avoid litigation.
House Bill 2620 addresses the conditions under which damages can be awarded in private actions involving health benefits against insurers. Specifically, it amends the Insurance Code to allow a plaintiff who is victorious in such an action to recover actual damages along with attorney's fees and costs. Notably, the bill introduces a new provision that permits the recovery of the greater of actual damages or a fixed amount of $10,000 in cases related to health benefits, enhancing the financial relief available for aggrieved parties.
However, there are notable points of contention surrounding the bill. Critics may argue that the introduction of a higher damages award could lead to increased litigation against insurers, potentially inflating costs that could be passed on to consumers in the form of higher premiums. Supporters counter that the bill is necessary to ensure that victims of insurance malpractice receive adequate relief and to maintain the integrity of healthcare coverage in the state.
The bill is set to take effect on September 1, 2017, and will only apply to causes of action that arise after this date. This provision ensures that existing claims will not be affected retroactively, which is a common legislative practice to protect ongoing legal proceedings.