A bill for an act relating to the duties of insurers under medical malpractice insurance policies.
Summary
HF 219 would create a new rule governing medical malpractice insurers that cover health care providers. The bill requires insurers to negotiate all claims in good faith and to consider settlement offers made within policy limits. If a claimant offers to settle within those limits and the insurer rejects or declines the offer, and the case later results in a judgment above the policy limits, the insurer would be liable for the full judgment amount rather than only the policy limit.
The bill also gives the insured health care provider a direct cause of action against the insurer if the insurer fails to negotiate a settlement within policy limits when such an offer is made. In that lawsuit, the provider could recover costs and reasonable attorney fees. In effect, the bill shifts more risk to insurers when they do not accept or properly evaluate settlement opportunities in malpractice cases.
Impact
This bill would add a new section to Iowa Code chapter 507B governing insurer duties in medical malpractice coverage. It would expand insurer exposure beyond contractual policy limits in certain cases, creating potential extra-contractual liability when an insurer declines a settlement offer within limits and the resulting judgment exceeds coverage. It would also create a statutory claim by the insured provider against the insurer, along with recovery of costs and attorney fees, which could affect claims handling, settlement practices, and malpractice insurance pricing and underwriting for health care providers.
Sentiment
Based on the bill text and the limited legislative history available, the measure appears to be a targeted policy proposal rather than a broadly debated bill. There are no recorded committee transcripts or votes in the provided materials, so no clear partisan or public sentiment can be inferred from debate. The bill’s structure suggests it is intended to protect health care providers from insurer decisions that expose them to excess judgments, which would likely be viewed favorably by providers and more cautiously by insurers.
Contention
The main point of contention is likely the shift of financial risk from the insured provider to the insurer when settlement opportunities within policy limits are rejected. Insurers may object that the bill effectively imposes bad-faith-style liability and could encourage defensive settlement behavior, higher premiums, or broader litigation over claims handling. Health care providers, by contrast, would likely support the bill because it gives them a remedy if an insurer’s refusal to settle leads to an excess judgment. No specific committee disagreements are documented in the provided record.
Requires health insurance and Medicaid coverage for family planning and reproductive health care services; prohibits adverse actions by medical malpractice insurers in relation to performance of legally protected health care services.
Requires health insurance and Medicaid coverage for family planning and reproductive health care services; prohibits adverse actions by medical malpractice insurers in relation to performance of legally protected health care services.