Insurer Group Takes Issue with Wrongful Death and Other Iowa Bills

March 27, 2009

The Iowa General Assembly is considering several insurance-related bills that could pose threats to consumers, including one that would expand wrongful death claims to allow recovery of highly speculative damages, which would likely increase the value of claims and drive up insurance costs for Iowa consumers, according to the Property Casualty Insurers Association of America (PCI).

HF 758, which was passed in the House this week, would allow an estate to recover damages for a decedent’s future loss of enjoyment of life.

“As the Senate now considers this bill, it’s important that lawmakers understand the very subjective nature of the issue and the effect on the value of insurance claims,” said Ann Weber, PCI vice president, regional manager and counsel. “While these are very unfortunate cases, the uncertain nature of the ‘loss of enjoyment of life’ damages will likely increase the value of claims and could result in overall increased costs of insurance for Iowa consumers.”

Iowa law already provides for full recovery of economic (identifiable dollar amounts, such as medical bills and lost wages), noneconomic (pain and suffering) and wrongful death (legal action by surviving family members) damages. “The new damages increase the amount recoverable for an intangible,” said Weber. “The additional costs for judgments under this bill would have to be passed on to Iowa consumers.”

SB 155 would change the Iowa workers compensation law from employer to employee choice of physician care for workers injured on the job. Currently, employers choose medical professionals who are well prepared to diagnose and treat occupational injuries and illness while assisting the employer and the worker with return-to-work decisions. Changing the law to employee choice of physician could result in injured workers not receiving appropriate care for the workplace injury.

“SB 155 would disrupt the important and critical balance between employees’ needs for high quality medical care for injuries occurring in the workplace and employers seeking a predictable and insurable cost structure to accommodate employee needs,” said Weber. “The likely impact would be higher medical and employer costs without any discernible benefit to the injured worker.”

PCI is also opposing SF 321, which includes a number of onerous provisions related to uninsured/underinsured motorist (UM/UIM) coverage, including mandatory “stacking,” or combining of UM/UIM coverage limits.

“Stacking distorts the original intent of the coverage,” said Weber. “PCI opposes mandating the practice and is working to help legislators understand that a variety of products are available for consumers to choose from, and that some insurers do in fact provide for stacking. We also want lawmakers to understand that the consumer, not the government, should be the one to choose what coverage is needed.”

Source: Property Casualty Insurers Association of America

Topics Carriers Workers' Compensation Iowa

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