JEFFERSON CITY, Mo. (AP) — A bill on Gov. Eric Greitens' desk would limit how much money insurance companies would have to pay after accidents.
The proposal affects cases where multiple people are owed money from an insurance company, such as after a car accident that leaves multiple people injured. If Greitens signs the bill, the driver's insurance company could not be obligated to pay more money than whatever is listed in its policy contract. The funds could be handed over to a court, which would determine how to distribute it to victims.
Insurance companies would still have to represent their clients in court throughout a trial.
The proposal was approved by the House Wednesday in a 110-34 vote, and passed the Senate earlier in the month 32-0. The bill is one of several pieces of legislation sponsored by Republicans aimed at making Missouri courts friendlier to businesses.
The bill's sponsor, Republican Rep. Bruce DeGroot of Chesterfield, said in a statement that the current law was "damaging the Missouri business climate, and reform was overdue." Supporters have argued the change will protect companies from being ordered to pay unreasonable amounts.
Currently, if insurance companies distribute money to victims on their own, that settlement releases their client and the company from further liability. Turning insurance money over to a court always leaves open the possibility of a future lawsuit.
The new law would provide an incentive for insurance companies to turn that policy money over to a court because the company itself would no longer be on the hook for future lawsuits, even if their client was later sued.
Justin Arnold, the Missouri Chamber of Commerce's general counsel, said he was confident that the final version of the bill wouldn't put the insured at any additional risk. Even if an individual was later sued for more money, he said, they would still be represented by the insurance company.
A.W. Smith, a personal injury lawyer with the A.W. Smith Law Firm, thought the bill would instead leave the insured "hanging in the wind." He said the bill would allow companies to not necessarily act in the best interest of their client because they couldn't be sued later over bad decisions.
He also questioned how strong a defense insurance companies would be obligated to offer in court if the proposal becomes law.
Smith is on the board of the Missouri Trial Lawyers Association, which opposes the measure. Some lawmakers also expressed concern that the measure would favor insurance companies over individuals.
"Ultimately, the bill still does not provide consumer protections that are needed," said Democratic Rep. Gina Mitten of St. Louis.
A spokesman for the governor did not respond to a question whether Greitens will sign the bill.
The bill is HB 1531.