South Dakota Senate Bill 169 Seeks to Codify “Made Whole” in All Insurance Policies
South Dakota Senate seeks to graft “made whole” into each and every subrogation provision which insurers seek to enforce in the state. The legislature in South Dakota is attempting to amend Title 58-11 of the Insurance Code by adding the following new section:
No insurer under this chapter is entitled to participate in any recovery from any tortfeasor on account of bodily injury or death or damage to property unless and until its insured has first been made whole.
The insurers governed by the Insurance Code include Health, Worker’s Compensation, Auto or Property. While the bill does not eliminate subrogation, the statue simply requires the party be “made whole” but does not define what makes an individual “whole” in the eyes of the law.
This bill would keep carriers from pursuing, settling or recovering on a subrogation claim when their insured has any type of “out-of-pocket” claim such as an overage rental expense, deductibles or other expenses which remain unpaid. In the uninsured motorist arena, the subrogation attorney would not be able to represent the insured for a deductible or other loss as a conflict exists over their being “made whole” first.
The South Dakota legislature moves extremely fast and to prevent passage of this bill your quick and immediate action is needed. NASP urges its membership to review and address this bill as it appears it will affect numerous lines of business. Insurance subrogation professionals need to make sure their government affairs individuals are alerted to this bill and its truly broad impact on their subrogation rights. Local attorneys may want to make their voices heard to their state legislators as to the impact this will have on their subrogation
Remember, the NASP website, www.subrogation.org provides beneficial information on the form of legislative fact sheets that may be useful in your efforts to educate other about the harmful effects of this proposed bill.
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