Maryland SB 45: Health Care Provider Malpractice Insurance - Authorization to Settle - Clarification

Bill Text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0045*

SENATE BILL 45
C4 9lr0074
(PRE–FILED)
By: Chair, Finance Committee (By Request – Departmental – Maryland Insurance
Administration)
Requested: October 15, 2018
Introduced and read first time: January 9, 2019
Assigned to: Finance

A BILL ENTITLED

AN ACT concerning 1

Health Care Provider Malpractice Insurance – Authorization to Settle – 2
Clarification 3

FOR the purpose of altering the settlement provision required to be included in policies of 4
health care malpractice insurance to clarify that the insurer is authorized, without 5
restriction, to negotiate and effect a compromise of claims unless the settlement 6
amount exceeds the limits of the insurer’s liability; and generally relating to 7
malpractice insurance coverage for health care providers. 8

BY repealing and reenacting, with amendments, 9
Article – Insurance 10
Section 19–104 11
Annotated Code of Maryland 12
(2017 Replacement Volume and 2018 Supplement) 13

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15

Article – Insurance 16

19–104. 17

(a) Each policy that insures a health care provider against damages due to 18
medical injury arising from providing or failing to provide health care shall contain 19
provisions that: 20

(1) are consistent with the requirements of Title 3, Subtitle 2A of the 21
Courts Article; and 22

2 SENATE BILL 45

(2) authorize the insurer, without restriction, to negotiate and effect a 1
compromise of claims [within] UNLESS THE SETTLEMENT AMOUNT EXCEEDS the limits 2
of the insurer’s liability[, if the entire amount settled on is to be paid by the insurer]. 3

(b) (1) An insurer may make payments to or on behalf of claimants for 4
reasonable hospital and medical costs, loss of wages, and expenses for rehabilitation 5
services and treatment, within the limits of the insurer’s liability, before a final disposition 6
of the claim. 7

(2) A payment made under this subsection: 8

(i) is not an admission of liability to or of damages sustained by a 9
claimant; and 10

(ii) does not prejudice the insurer or any other party with respect to 11
any right, claim, or defense. 12

(c) (1) A policy issued or delivered under subsection (a) of this section may 13
include coverage for the defense of a health care provider in a disciplinary hearing arising 14
out of the practice of the health care provider profession if the cost of the included coverage 15
is: 16

(i) itemized in the billing statement, invoice, or declarations page 17
for the policy; and 18

(ii) reported to the Commissioner in a form and manner required by 19
the Commissioner. 20

(2) A policy providing coverage for the defense of a health care provider in 21
a disciplinary hearing arising out of the practice of the health care provider’s profession 22
may be offered and priced separately from a policy issued or delivered under subsection (a) 23
of this section. 24

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 25
October 1, 2019. 26