FISCAL NOTE
Date Requested: February 12, 2024
Time Requested: 03:49 PM |
| Agency: |
Risk and Insurance Management, Board of (BRIM) |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3689 |
Introduced |
HB5643 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens; Insurance |
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|
FUND(S):
2360 State Special Insurance Fund; 2363 Public Entity Insurance Trust Fund
Sources of Revenue:
Special Fund Special Fund Both funds 2360 and 2363
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The proposed legislation, upon passage, would limit damages and attorney’s fees on jury awards in civil suits where an attorney requested policy limits under Shamblin v. Nationwide Mut. Ins. Co. 183 W. Va. 585 (1990). Currently, if a monetary demand under Shamblin is received and a jury awards a verdict greater than the policy limits in a civil suit, BRIM would be required to pay the amount over policy limits.
Under the proposed legislation, monetary exposure would be placed on the insured. BRIM and the insurance company would not be responsible for paying any amount greater than policy limits. This could encourage plaintiff’s attorneys to accept settlement values at policy limits or less, knowing that recovery from the insured individual may be problematic. In a few cases, the legislation may reduce settlement values and the costs incurred from defending cases with prolonged litigation.
Estimating the number and value of this type of case is difficult because each case is subjective, and factors vary throughout the suit and mediation process.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Estimating future costs or savings is difficult because of the subjective nature of civil suits and the mediation process. During the last few years, BRIM has had only one jury award for an amount that was greater than policy limits. This involved a “shamblinized” civil suit. Currently, this suit is pending judicial review at the request of BRIM’s defense counsel.
Most of the plaintiffs’ counsel request a settlement at the policy limit. Often, mediation results in a settlement amount that is less than policy limits. Estimating how the proposed bill would impact future settlements and verdicts is difficult.
BRIM’s actuaries were unable to provide a specific calculation for anticipated differences in future expenses and revenues. However, it is reasonable to assume a limited effect would result from the proposed legislation.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Melody Duke
Email Address: melody.a.duke@wv.gov