Senate Bill 2757

AN ACT TO CREATE NEW SECTION 43-19-50, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT INSURERS AND INSURANCE COMPANIES SHALL PROVIDE CERTAIN INFORMATION TO THE MISSISSIPPI DEPARTMENT OF HUMAN SERVICES TO SATISFY CHILD SUPPORT ARREARS OF NONCUSTODIAL PARENTS; TO SET CERTAIN RESTRICTIONS RELATED THERETO; TO REQUIRE THE DEPARTMENT TO FACILITATE A SECURE ELECTRONIC PROCESS TO EXCHANGE INFORMATION; TO REQUIRE INSURERS TO WITHHOLD CLAIM PAYMENTS OR SETTLEMENTS UPON RECEIPT OF A NOTICE THAT THE CLAIMANT HAS OUTSTANDING CHILD SUPPORT OBLIGATIONS; TO PROVIDE THAT PRIORITY OVER WITHHOLDING THESE PAYMENTS SHALL BE GIVEN TO ATTORNEY FEES OR COSTS INCURRED, IF ANY, AND ANY STATUTORY OR SUBROGATION LIENS FOR MEDICAL EXPENSES; TO PROVIDE THAT ANY INFORMATION OBTAINED PURSUANT TO THIS ACT MUST BE USED ONLY FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THIS SECTION; TO PROVIDE THAT FAILURE TO COMPLY WITH THE PROVISIONS OF THIS ACT SHALL SUBJECT THE INSURER OR INSURANCE COMPANY TO A FINE OF NOT LESS THAN $1,000.00; AND FOR RELATED PURPOSES.

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

SECTION 1. The following shall be codified as Section 43-19-50, Mississippi Code of 1972:

43-19-50. (1) As used in this section, the following terms shall have the meanings ascribed herein:

(a) "Economic benefit" is defined as a payment in which an individual is paid directly by an insurer as the payee or co-payee of a first-party or third-party claim; this term excludes claims for actual repair, replacement of loss or personal property; benefits payable for actual expenses to funeral service provider or facility; medical payments coverage under a motor vehicle liability policy; benefits payable under a limited benefit insurance policy for coverage of specified diseases or illnesses, dental or vision benefits, or indemnity coverage; benefits paid in accordance with long-term care benefit plan; benefits paid on behalf of an individual directly to a retirement plan or an accelerated death benefit.

(b) "First-party claim" shall mean a claim made by the insured or policyholder under an insurance policy or contract or by a beneficiary.

(c) "Third-party claim" shall mean a claim for bodily injury, property damage or other damages brought by a third party against an insured that is covered by a liability insurance policy or contract by a self-insured.

(d) "Insurance claim data collection organization" means an organization that maintains a centralized database of information concerning insurance claims to assist insurers who subscribe to the database in processing claims and detecting and preventing fraud.

(e) "Insurer" means a person who holds a certificate of authority to transact insurance in this state.

(2) Except as otherwise provided in subsection (10) of this section, each insurer or insurance company, as defined by Sections 83-19-1 and 83-7-1 under the regulatory authority of the Mississippi Department of Insurance, shall exchange information with the Mississippi Department of Human Services (MDHS) in the manner prescribed by MDHS to verify whether the claimant owes debt for the support of one or more children not later than five (5) days after the opening of a claim which seeks an economic benefit for the claimant that is Five Hundred Dollars ($500.00) or more. The obligation of an insurer to exchange information with MDHS is discharged upon complying with the requirements of this subsection.

(3) To the extent feasible, the MDHS shall facilitate a secure electronic process to exchange information with insurers and file liens and levies. When the operation of such data match system results in a match for a noncustodial parent who owes past-due support, or when a claim is located through any other means, MDHS:

(a) Shall have the authority to encumber and seize assets payable to an obligor; and

(b) May request and shall receive additional financial or other information, including account numbers, names and Social Security numbers on record for accounts and account balances, from any insurer or insurance company needed to establish, modify or enforce a support order.

(c) The insurer or insurance company shall not disclose to a claim holder, policy holder, or contract beneficiary that the name of such person has been received from or furnished to MDHS. The insurer or insurance company shall disclose to its account holders or its depositors that under the data match system, MDHS has the authority to request certain identifying information on the account holder's or the depositor's accounts.

(4) Notice of such encumbrance initiated by MDHS shall be provided to the insurer, insurance company or any applicable commission via electronic means, regular mail or as prescribed in Section 71-3-129. Notice shall be delivered to the obligor via regular mail at the current mailing address as recorded by MDHS at the commencement of the action described herein.

(5) Except as otherwise provided in subsection (8) of this section, if an insurer is notified by MDHS that a claimant owes debt for the support of one or more children, the insurer, upon receipt of a notice issued by the enforcing authority identifying the amount of debt owed, shall:

(a) Notify the claimant and his or her attorney, if known to the insurer, of the debt owed not later than five (5) days after receiving notice from the enforcing authority;

(b) Withhold from claim payments, awards, settlements or payments intended to prevent litigation, the amount specific in the notice; and

(6) When an insurer withholds and remits any money to the enforcing authority pursuant to subsection (4) of this section, the insurer shall notify the claimant and his or her attorney, if known to the insurer, of that fact.

(7) Any amount encumbered and forwarded by the insurer or insurance company under this section shall not exceed the arrearage owed by the obligor.

(8) Priority over any withholding of payments pursuant to subsection (4) of this section shall be given to (a) attorney's fees or costs incurred, if any, and (b) judgment, statutory or subrogation liens for medical expenses incurred as a result of the injury causing the claim.

(9) Any information obtained pursuant to this section must be used only for the purpose of carrying out the provisions of this section. Notwithstanding the provisions of this subsection, an insurer or an insurance claim data collection organization approved by MDHS or other entity that performs the functions described in subsection (10) of this section may not be held liable in any civil or criminal action under federal or state law for any act made in good faith pursuant to this section, including, without limitation:

(a) Any disclosure of information to the MDHS or the federal Office of Child Support Enforcement; or

(b) The withholding of any money from payment on a claim or the remittance of such money to the enforcing authority.

(10) For claims filed prior to the enactment of this section, an insurer shall not delay the disbursement of a payment on a claim to comply with the requirements of this section. An insurer is not required to comply with subsection (4) of this section if the notice issued by the enforcing authority is received by the insurer after the insurer has disbursed the payment on the claim. In the case of a claim that will be paid through periodic payments, the insurer:

(a) Is not required to comply with the provisions of subsection (4) of this section with regard to any payments disbursed to the claimant before the notice was received by the insurer; and

(b) Shall comply with the provisions of subsection (4) of this section with regard to any payments on the claim scheduled to be made after the receipt of the notice.

(11) The insurer may comply with the requirements of this section by (a) reporting directly to MDHS or its designee, or (b) authorizing the insurance claim data collection organization to provide claimant information to the federal Office of Child Support Enforcement of the United States Department of Health and Human Services.

(12) Failure to comply with the provisions of this section or the willful rendering of false information shall subject the insurer or insurance company to a fine of not less than One Thousand Dollars ($1,000.00).

SECTION 2. This act shall take effect and be in force from and after July 1, 2024.