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SPONSOR: |
Foley |
DATE TYPED: |
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HB |
697 |
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SHORT TITLE: |
Uninsured Motorist Punitive Damages |
SB |
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ANALYST: |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI |
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Responses
Received From
Administrative
Office of the Courts (AOC)
Public
Regulation Commission (PRC)
SUMMARY
Synopsis
of Bill
House Bill 697
allows uninsured motorist coverage to exclude coverage for any punitive damages
that the policyholder would be entitled to receive if the at-fault motorist had
been insured.
Significant Issues
The PRC states
punitive damages are above and beyond the actual damages incurred by the policyholder
and exist, by definition, to punish the at-fault driver for gross driving
misconduct. Since these are paid by the
policyholder’s insurance company through uninsured motorist coverage and not by
the at-fault driver, they do not achieve their intended purpose.
HB 697 will leave the
policyholder who is harmed by another driver without insurance with no
possibility of receiving punitive damages unless the at-fault driver has some assets.
Uninsured motorist premiums will go down if
punitive damages are excluded from the coverage, but the PRC estimates that the
decrease will be very small.
ADMINISTRATIVE IMPLICATIONS
The
Insurance Division of the PRC will have to review several hundred amended rate
and form filings.
TECHNICAL ISSUES
HB
697 makes it optional to exclude punitive damage, but the bill does not state
who gets to choose the option – the insurance company or the policyholder.