First Regular Session H.B. 2360
PROPOSED AMENDMENT
SENATE AMENDMENTS TO H.B. 2360
(Reference to House engrossed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 23-930, Arizona Revised Statutes, is amended to read:
23-930. Unfair claim processing practices; bad faith; benefit penalties; civil penalty; hearing; enforcement; definitions
A. The commission has exclusive jurisdiction as prescribed in this section over complaints involving alleged unfair claim processing practices or bad faith by an employer, a self‑insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter the administration of a workers' compensation claim. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion.
B. A complaint of unfair claim processing or bad faith must be filed with the commission within one year after any of the following, whichever is later:
1. The action or omission alleged as the basis of the complaint occurred.
2. A notice of claim status accepting liability for the disputed benefits becomes final.
3. An award of benefits issued by the commission becomes final.
C. A complaint that is not filed as provided by subsection B of this section shall be dismissed with prejudice. The one‑year filing requirement provided by subsection B of this section is the limitation of actions for any claim or complaint in tort or contract arising out of the administration of the workers' compensation claim for benefits.
B. D. If the commission finds that unfair claim processing or bad faith has occurred in the handling administration of a particular claim, it shall award the claimant employee, in addition to any benefits it finds are due and owing, a benefit penalty of twenty‑five per cent of the benefit amount ordered to be paid or five hundred dollars, whichever is more. as follows:
1. For a finding that an initial claim for benefits under this chapter was denied without any reasonable basis, a benefit penalty of five thousand dollars shall be awarded on a claim found compensable that does not result in initial temporary disability or a period of disability of not more than fourteen days. A benefit penalty of ten thousand dollars or one hundred percent of the disability benefits owed, whichever is more, shall be awarded for a compensable claim that results in a period of disability of more than fourteen days.
2. For a finding of unfair claim processing on an accepted claim, a benefit penalty of one thousand dollars.
3. For a finding of bad faith that results from a delay or failure to pay temporary or permanent disability benefits on an accepted claim, a benefit penalty of five thousand dollars.
4. For a finding of bad faith that results in a denial or delay of medical treatment on an accepted claim, a benefit penalty of five thousand dollars for each occurrence of denied or delayed treatment. If the commission determines, based on competent medical evidence, that the delay of medical treatment permanently aggravated the employee's medical condition or resulted in greater permanent disability, an additional ten thousand dollars may be awarded to the employee.
E. The benefit penalty provided by this section is the employee's exclusive remedy for unfair claim processing or bad faith committed by the self-insured employer, insurance carrier or claim processing representative, except that after a commission award for a benefit penalty under this section becomes final, the employee may file a civil action to recover compensatory damages for injuries that are separate and independent of the workers' compensation injury and that arise out of the wilful misconduct of the self‑insured employer, insurance carrier or claim processing representative that resulted in the unfair claim processing or bad faith handling of the claim. A court does not have jurisdiction over a complaint alleging wilful misconduct pursuant to this subsection until the commission issues a final award on the complaint. The civil action shall be filed in a court of competent jurisdiction within ninety days after the date that the award becomes final. Punitive damages are not recoverable in any civil action brought pursuant to this subsection. Any claim for compensatory damages not filed as provided by this subsection shall be dismissed with prejudice.
C. F. If the commission finds that an employer, a self‑insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to one not more than five thousand dollars for each violation found. The civil penalty shall be deposited, pursuant to sections 35‑146 and 35‑147, in the state general fund.
D. G. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23‑947. The hearing and decision shall be conducted pursuant to the provisions of section 23‑941.
H. Not later than thirty days before the date of the initial hearing, the defendant may move to dismiss the complaint on any of the following grounds:
1. The alleged acts, if assumed to be true, do not support a finding of unfair claim processing or bad faith as a matter of law.
2. The alleged acts were the same acts alleged in a previous commission proceeding adjudicated to conclusion.
3. The complaint was not timely filed as provided by subsection B of this section.
4. The complaint relates to a claim for workers' compensation benefits that has not been accepted or adjudicated.
I. A response shall be filed within ten days after the motion to dismiss is filed. The administrative law judge shall rule on the motion before the initial hearing.
J. A self-insured employer, insurance carrier or claim processing representative that is ordered to pay a benefit penalty pursuant to this section shall pay the benefit penalty no later than the first business day after the date the award becomes final. Interest shall accrue on the benefit penalty pursuant to section 44‑1201 from the date on which the payment is due pursuant to this subsection.
K. A final award for unfair claim processing or bad faith may be enforced under the provisions of title 12, chapter 9, article 3.
E. L. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission's own experience in processing workers' compensation claims and the workers' compensation and insurance laws of this state.
F. M. This section shall does not be construed as limiting limit or interfering interfere with the authority of the department of insurance as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance over unfair claim settlement practices as provided in section 20‑461.
N. For the purposes of this section:
1. "Occurrence" means a specific recommended surgical procedure, medication, consultation, diagnostic study or medical apparatus or a recommended treatment plan that may involve more than one visit to a provider, including a course of physical therapy.
2. "Wilful misconduct" means that the denial, delay or termination of benefits was committed with knowledge that the act lacked any reasonable basis in law or fact and that the act was committed with intent to inflict harm on the employee.
Sec. 2. Nonseverability
If any portion of this act is finally adjudicated invalid, the entire act is void. The provisions of this act are intended to be nonseverable."
Amend title to conform
KIMBERLY YEE |