COMMITTEE SUBSTITUTE
FOR
H. B. 4214
(By Delegates
Fleischauer, Miley, Brown, Caputo,
Guthrie, Longstreth, Perdue, D. Poling,
Shook, Williams and Ellem
)
(Originating in the Committee on the Judiciary)
[February 24, 2010]
A BILL to amend and reenact §23-5-7 of the Code of West Virginia,
1931, as amended, relating to review and approval of final
settlements of Workers' Compensation awards; providing review
of all old fund settlements by the insurance commissioner;
providing review and approval of settlements of pro se
claimants by current workers compensation system claims by the
administrative law judge upon recommendation of the compromise
settlement division within the offices of the insurance
commission; creating compromise settlement division; providing
criteria and process for settlement reviews; directing the
insurance commissioner to promulgate forms; providing that
forms submitted on all workers compensation settlements;
establishing a process for administering claim reviews;
insurance commissioner to promulgate legislative rules; and
providing internal effective date.
Be it enacted by the Legislature of West Virginia:
That §23-5-7 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 5. Review.
§23-5-7. Compromise and settlement.
(a) With the exception of medical benefits for nonorthopedic
occupational disease claims, the claimant, the employer and the
workers' compensation commission, the insurance commissioner, the
successor to the commission, other private insurance carriers
carrier and self-insured employers or self-insured employer,
whichever is applicable, and the claimant may negotiate a final
settlement of any and all issues in a claim, and any settlement
agreement may provide for a lump-sum payment or a structured payment
plan, or any combination thereof, or any other basis as the parties
may agree: Provided, That except with respect to settlements entered
into by the insurance commissioner acting as administrator of the
old fund created in article two-c of this chapter, every settlement
proposal in which the claimant is pro se in settlement negotiations,
must be submitted to the compromise settlement division for review
and approval in accordance with this section and the rules
promulgated hereunder: Provided, however, That the insurance
commissioner, acting as administrator of the old fund created in
article two-c of this chapter, may only enter into such settlements
as he or she determines, under the standards used by the compromise
settlement division in formulating its recommendations, are in the
best interests of the claimant or, if the claimant is deceased, his or her dependents, the employer and the state.
wherever the claim
is in the administrative or appellate processes.
If the employer is
not active in the claim, the commission, the successor to the
commission, other private insurance carriers and self-insured
employers, whichever is applicable, may negotiate a final settlement
of any and all issues in a claim except for medical benefits for
nonorthopedic occupational disease claims with the claimant and said
settlement shall be made a part of the claim record.
(b) The insurance commissioner shall establish within the
office of judges a compromise settlement division to review each pro
se claimant settlement subject to approval and to issue a
recommendation to the chief administrative law judge.
(c) Every settlement regardless of whether the claimant is pro
se or has legal representation, including settlements involving the
insurance commissioner acting as administrator of claims involving
the old fund created in article two-c of this chapter, must be
submitted to the insurance commissioner on forms as provided by his
or her office.
(d) (1) Upon receipt of a completed application for approval
of a settlement proposal from a pro se claimant, the compromise
settlement division shall, after consideration of those factors
prescribed by rule, issue its recommendation to the chief
administrative law judge within thirty days.
(2) Upon review of such a recommendation, the chief
administrative law judge shall enter an order either:
(A) Adopting the recommendation as filed if he or she
finds that the settlement is in the best interests of the claimant
and his or her dependents, the employer and the state; or
(B) Rejecting the recommendation and, if the chief judge
deems it advisable, remanding the matter to the settlement review
division with directions to resubmit the recommendation after
reconsideration of any issues designated in the remand order.
(3) Settlements of claims on funds administered by the
insurance commissioner and orders approving settlements issued
pursuant to this section are not subject to further review,
including a hearing or review under article five of this chapter
and, except in cases of fraud, no issue that is the subject of such
a an approved settlement agreement may be reopened by any party
including the commission, the successor to the commission, other
private insurance carriers and self-insured employers, whichever is
applicable. Any settlement agreement may provide for a lump-sum
payment or a structured payment plan, or any combination thereof,
or any other basis as the parties may agree.
(e) If a self-insured employer later fails to make the an
agreed-upon payment, the commission self-insured employer security
risk pool or self-insured employer guaranty risk pool, as
appropriate shall assume the obligation to make the payments and the
insurance commissioner shall on behalf of such risk pool recover the
amounts paid or to be paid from the self-insurer employer and its sureties or guarantors or both
as provided in section five and five-
a, article two of this chapter.
(f) The insurance commissioner shall promulgate rules in
accordance with subsection (b), section ten, article two, chapter
thirty-three of this code, to establish standards and procedures for
the review and approval of pro se claimant settlement proposals,
which may include such matters as the following:
(1) The extent to which the proposal avoids undue expense,
litigation or hardship;
(2) The possible shifting of costs for future medical and
other expenses of the claimant to the state or other persons;
(3) Verification that the claimant fully understands the
impact of the settlement on future insurance claims relating to the
injury; and
(4) Penalties for noncompliance with this section.
(g) Each settlement agreement relating to the old fund created
by article two-c of this chapter shall provide the toll free number
of the West Virginia State Bar Association and shall provide the
injured worker with five business days to revoke the executed
agreement. The insurance commissioner may void settlement agreements
entered into by an unrepresented injured worker which are determined
to be unconscionable pursuant to criteria established by rule of the
commissioner.
The amendments to this section enacted during the regular
session of the Legislature in the year one thousand nine hundred ninety-nine shall apply to all settlement agreements executed after
the effective date.
(h) The amendments to this section enacted during the two
thousand ten regular legislative session shall become effective
January 1, 2011.
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