House Bill 14

AN ACT TO AMEND SECTION 11-1-60, MISSISSIPPI CODE OF 1972, TO REVISE CAPS ON NONECONOMIC DAMAGES; TO PROVIDE FOR A DIRECT ACTION AGAINST AN INSURER; TO PROVIDE THAT POLICY SHALL CONTAIN PROVISIONS THAT INSOLVENCY OR BANKRUPTCY OF THE INSURED SHALL NOT RELEASE THE INSURER FROM LIABILITY; TO PROVIDE THAT ACTIONS MAY BE BROUGHT AGAINST THE INSURER ALONE IN CERTAIN SITUATIONS; TO PROVIDE THAT THE INSURANCE POLICY SHALL BE ADMISSIBLE INTO EVIDENCE; TO PROVIDE A ROLL BACK ON INSURANCE RATES; TO PROVIDE THAT CLAUSES REQUIRING AN INSURED TO CONSENT BEFORE A CLAIM IS SETTLED ARE VOID AS AGAINST PUBLIC POLICY; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 11-1-60, Mississippi Code of 1972, is amended as follows:

11-1-60. (1) For the purposes of this section, the following words and phrases shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Noneconomic damages" means subjective, nonpecuniary damages arising from death, pain, suffering, inconvenience, mental anguish, worry, emotional distress, loss of society and companionship, loss of consortium, bystander injury, physical impairment, injury to reputation, humiliation, embarrassment, loss of the enjoyment of life, hedonic damages, other nonpecuniary damages, and any other theory of damages such as fear of loss, illness or injury. The term "noneconomic damages" shall not include damages for disfigurement, nor does it include punitive or exemplary damages.

(b) "Actual economic damages" means objectively verifiable pecuniary damages arising from medical expenses and medical care, rehabilitation services, custodial care, disabilities, loss of earnings and earning capacity, loss of income, burial costs, loss of use of property, costs of repair or replacement of property, costs of obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, and other objectively verifiable monetary losses.

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(2) (a) In any cause of action filed on or after July 1, 2004, in the event the trier of fact finds the defendant liable, they shall not award the plaintiff more than Five Million Dollars ($5,000,000.00) for noneconomic damages.

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It is the intent of this section to limit all noneconomic damages to the above.

(b) The trier of fact shall not be advised of the limitations imposed by this subsection (2) and the judge shall appropriately reduce any award of noneconomic damages that exceeds the applicable limitation.

(3) The limitation on noneconomic damages set forth in subsection (2) shall not apply in cases where the judge determines that a jury may impose punitive damages.

(4) Nothing in this section shall be construed to impose a limitation on damages for disfigurement, substantial impairment, permanent physical impairment, permanent loss or damage to a reproductive organ resulting in inability to procreate, severe disfigurement, gross malpractice, jury awards of punitive damages or actual economic damages.

(5) The Department of Finance and Administration shall adjust the caps in this section for inflation as determined by the consumer price index.

SECTION 2. (1) No policy or contract of liability insurance shall be issued or delivered in this state unless it contains provisions to the effect that the insolvency or bankruptcy of the insured shall not release the insurer from the payment of damages for injuries sustained or loss occasioned during the existence of the policy. Any judgment which may be rendered against the insured for which the insurer is liable which shall have become executory shall be deemed prima facie evidence of the insolvency of the insured, and an action may thereafter be maintained within the terms and limits of the policy by the injured person or his or her survivors or heirs against the insurer.

(2) (a) The injured person or his or her survivors or heirs mentioned in subsection (1) of this section, at their option, shall have a right of direct action against the insurer within the terms and limits of the policy; and such action may be brought against the insurer alone, or against both the insured and insurer jointly and in solido, in the county in which the accident or injury occurred or in the county in which an action could be brought against either the insured or the insurer under the general rules of venue prescribed by the Rules of Civil Procedure only. However, such action may be brought against the insurer alone only when:

(i) The insured has been adjudged a bankrupt by a court of competent jurisdiction or when proceedings to adjudge an insured a bankrupt have been commenced before a court of competent jurisdiction;

(ii) The insured is insolvent;

(iii) Service of citation or other process cannot be made on the insured;

(iv) When the cause of action is for damages as a result of an offense or quasi-offense between children and their parents or between married persons; or

(v) When the insurer is an uninsured motorist carrier.

(b) This right of direct action shall exist whether or not the policy of insurance sued upon was written or delivered in the State of Mississippi and whether or not such policy contains a provision forbidding such direct action, provided the accident or injury occurred within the State of Mississippi. Nothing contained in this section shall be construed to affect the provisions of the policy or contract if such provisions are not in violation of the laws of this state.

(3) The policy or contract of liability insurance shall be admissible into evidence in any proceeding regarding such policy or contract of liability insurance.

(4) It is the intent of this section that any action brought under the provisions of this section shall be subject to all of the lawful conditions of the policy or contract and the defenses which could be urged by the insurer to a direct action brought by the insured, provided the terms and conditions of such policy or contract are not in violation of the laws of this state.

(5) It is also the intent of this section that all liability policies within their terms and limits are executed for the benefit of all injured persons and their survivors or heirs to whom the insured is liable and that it is the purpose of all liability policies to give protection and coverage to all insureds, whether they are named insureds or additional insureds under the omnibus clause, for any legal liability such insured may have as or for a tort-feasor within the terms and limits of such policy.

SECTION 3. All insurance companies writing medical malpractice insurance in the State of Mississippi shall roll back premium rates to the amount charged on July 1, 2001, unless such roll back shall result in an increase in premium rates. The Commissioner of Insurance shall enforce compliance with the provisions of this section. Any insurance company who violates the provisions of this section shall, upon conviction, be fined Fifty Thousand Dollars ($50,000.00) for each violation.

SECTION 4. Any clause or provision in a policy of insurance that requires the insured to consent before a claim is settled, is void as against public policy. The insurance carrier shall have the right to settle or resolve any claim for which it provides coverage and the carrier shall not be liable to the insured for any action taken in the settlement of the claim. No carrier shall base its decision to settle or not settle a claim for which it has coverage in whole or in part on the opinion, desire or decision of the insured. Such decisions shall be made by the carrier based entirely on the facts of the individual claim.

SECTION 5. This act shall take effect and be in force from and after July 1, 2004, and shall apply to all causes of action filed on or after that date.