Provides that payment of interest payment and attorney fees to claimant when payment of a claim is overdue shall be exclusive remedy

2025 Regular Session Introduced by Leroy Comrie

Overdue claim payments obligate insurers to pay interest and the claimant’s attorney fees, with these remedies declared exclusive for overdue payments.

REFERRED TO INSURANCE

Overview

Bill number: S 5343

Title/purpose: Provides that payment of interest, payment, and attorney fees to a claimant when a claim payment is overdue shall be the exclusive remedy

Status: Referred to the Insurance Committee

Introduced: February 20, 2025

Sponsor: Leroy Comrie (primary)

Classification: Bill

Legislative actions: 2025-02-20 — REFERRED TO INSURANCE (listed twice in the record)

What the bill would do

The bill would mandate that if a claimant’s claim payment is overdue, the insurer must provide:

Interest on the overdue amount
Payment of the claimant’s reasonable attorney fees incurred in pursuing the overdue payment

The bill specifies that these remedies — interest, payment, and attorney fees — would be the claimant’s exclusive remedy for the overdue payment. In other words, other civil penalties or damages related to the delay would not be pursued under this statute.

Key provisions (as stated)

Overdue claim payments trigger an obligation for the insurer to pay interest.

Overdue claim payments also trigger payment of the claimant’s attorney fees related to pursuing the overdue payment.

The remedy for overdue payment is declared exclusive, potentially limiting other forms of recovery or litigation related to the delay.

Note: The available information does not specify the exact terms, such as the interest rate, what constitutes “overdue,” which types of claims are covered (e.g., health, auto, property), or any caps on attorney fees. Those details would be defined in the full text of the bill.

Who would be affected

Claimants/insureds/policyholders who have claims with insurers that are overdue.

Insurance companies/insurers and their claim-handling processes, as they would be required to pay interest and attorney fees when a payment is overdue and face potential shifts in remedy expectations.

Legal practitioners representing claimants, who would handle cases revolving around overdue payments and attorney fees.

Legislative status and timeline

Currently in the Insurance committee. There is no information here about subsequent steps or a timeline beyond the initial referral.

Related bills from prior sessions (S 1056, S 2892, S 1686, S 6448, S 2638, S 779, S 3513, S 4046, S 2814) indicate ongoing consideration of similar concepts in past sessions.

Potential impact and considerations

Benefits to claimants: clearer, faster remedy for overdue payments; potential recovery of attorney fees and interest without pursuing broader litigation.

Costs to insurers: possible increase in short-term claim settlements costs due to mandatory interest and attorney-fee payments; potential behavioral shift toward faster payments.

Policy implications: establishes a clear exclusive remedy for overdue payments, which could influence how overdue payments are litigated and resolved.

Open questions to watch: the specific rate of interest, definitions of “overdue,” scope of covered claims, any caps or caps on attorney fees, and interaction with other state insurance statutes or consumer protections.

Next steps for readers

Monitor the bill’s progression in the Insurance Committee for amendments, a potential floor vote, and any sponsor or coalition changes.

Review the full text once available to understand precise definitions (e.g., overdue threshold, interest methodology) and any exceptions or transitional provisions.

Bill