1| SENATE FLOOR VERSION | | April 24, 2025 | 2| AS AMENDED | | | 3|ENGROSSED HOUSE | |BILL NO. 2144 By: Kannady, Deck, Pae, | 4| Schreiber, Rosecrants, | | Provenzano, Moore, Harris, | 5| Miller, Roe, Humphrey, | | Ranson, Townley, Pfeiffer, | 6| Caldwell (Chad), Cantrell, | | Turner, Marti, George, | 7| Manger, and Waldron of the | | House | 8| | | and | 9| | | Weaver and Hines of the | 10| Senate | | | 11| | | | 12| | | | 13| [ insurance - cause of action determination - | | policy, contract, or plan provisions - administrative | 14| remedies - trial by jury - damages - award - | | codification - effective date ] | 15| | | | 16| | | | 17|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: | | | 18| SECTION 1. NEW LAW A new section of law to be codified | | | 19|in the Oklahoma Statutes as Section 1119 of Title 12, unless there | | | 20|is created a duplication in numbering, reads as follows: | | | 21| This act shall be known and may be cited as the "Insurance | | | 22|Consumers Protection Act". | | | 23| | | | 24| | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 1 ___________________________________________________________________________
1| SECTION 2. NEW LAW A new section of law to be codified | | | 2|in the Oklahoma Statutes as Section 1119.1 of Title 12, unless there | | | 3|is created a duplication in numbering, reads as follows: | | | 4| As used in the Insurance Consumers Protection Act: | | | 5| 1. "Bad faith" means conduct of an insurer that violates its | | | 6|duty or duties of good faith and fair dealing to a first-party | | | 7|claimant or third-party beneficiary by acts including but not | | | 8|limited to unreasonably or untimely refusing to pay or tender the | | | 9|proper benefits for a valid claim under the insurance policy. This | | | 10|duty of good faith and fair dealing is contained in every insurance | | | 11|contract and is a nondelegable duty; | | | 12| 2. "First-party claimant" means an individual corporation, | | | 13|association, partnership, or other legal entity asserting an | | | 14|entitlement to benefits owed directly to or on behalf of an insured | | | 15|under an insurance policy. First-party claimants include a public | | | 16|entity that has paid a claim for benefits dues to an insurer's | | | 17|unreasonable delay or denial of the claim; | | | 18| 3. "Insurance" is a contract whereby one undertakes to | | | 19|indemnify another or to pay a specified amount upon determinable | | | 20|contingencies; | | | 21| 4. "Insurer" means every person engaged in the business of | | | 22|making, selling, or binding contracts of health insurance or | | | 23|indemnity in Oklahoma, except for independent insurance agents and | | | 24|captive insurance agents that market for only one insurer. A | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 2 ___________________________________________________________________________
1|nonprofit hospital service and medical indemnity corporation is an | | | 2|insurer within the meaning of this act. The term insurer does not | | | 3|include burial associations; | | | 4| 5. "Insured" means a person for whom the insurance policy is | | | 5|written to protect; | | | 6| 6. "Issued in this state" refers to every health and disability | | | 7|policy, health insurance contract, health insurance certificate, and | | | 8|health insurance agreement existing, offered, issued, delivered, or | | | 9|renewed in the State of Oklahoma or providing health or disability | | | 10|benefits to a resident or domiciliary of the State of Oklahoma and | | | 11|every employee benefit plan covering a resident or domiciliary of | | | 12|the State of Oklahoma, whether or not on behalf of an employer | | | 13|located or domiciled in Oklahoma, on or after January 1, 2005, | | | 14|notwithstanding any contractual or statutory choice-of-law provision | | | 15|to the contrary; | | | 16| 7. "Person" means an individual, entity, company, insurer, | | | 17|association, organization, society, reciprocal or inter-insurance | | | 18|exchange, partnership, syndicate, business trust, or corporation; | | | 19| 8. "Prior authorization" or "pre-authorization" means the | | | 20|review and approval by the insurer of treatment recommendations from | | | 21|a health insurance policyholder's physician or the review by the | | | 22|insured's agent experienced in remedying the type of casualty or | | | 23|damage at issue; and | | | 24| | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 3 ___________________________________________________________________________
1| 9. "Third-party beneficiary" means a person that receives | | | 2|health benefits from a contract between two other parties, one of | | | 3|which is an insurer, even though they are not a party to the | | | 4|contract. | | | 5| SECTION 3. NEW LAW A new section of law to be codified | | | 6|in the Oklahoma Statutes as Section 1119.2 of Title 12, unless there | | | 7|is created a duplication in numbering, reads as follows: | | | 8| A. There is hereby created a statutory cause of action for an | | | 9|insured under a health insurance policy, as a first-party claimant, | | | 10|and any third-party beneficiary to the contract of insurance between | | | 11|the insurer and insured, to maintain an action in district court or | | | 12|any court of competent jurisdiction for the bad faith refusal of or | | | 13|untimely pre-authorization of benefits, and for payment of such | | | 14|benefits. | | | 15| B. Provided, however, the recommended treatment for which | | | 16|pre-authorization or payment of benefits is sought shall be | | | 17|reasonable and necessary for the person covered by the insurance | | | 18|policy. The reasonableness and necessity of the recommended | | | 19|treatment shall be determined by a jury. | | | 20| C. Either the first-party claimant or third-party beneficiary | | | 21|may prosecute a claim for bad faith created by this act. | | | 22| D. A health insurance policy, insurance contract, or plan that | | | 23|is issued in this state shall not contain a provision purporting to | | | 24|reserve discretion to the insurer, plan administrator, or claim | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 4 ___________________________________________________________________________
1|administrator to interpret the terms of the policy, contract, or | | | 2|plan or to determine eligibility for benefits. If an insurance | | | 3|policy, contract, or plan contains such a provision, the provision | | | 4|is void. | | | 5| E. There is no requirement to exhaust any administrative | | | 6|remedies with the Oklahoma Insurance Department before filing an | | | 7|action asserting a cause of action for bad faith in a district | | | 8|court. | | | 9| F. A claimant under this section is entitled to a trial by | | | 10|jury. | | | 11| G. The issue of bad faith is always a question of fact which | | | 12|must be submitted to a jury pursuant to Section 6 of Article 2 of | | | 13|the Oklahoma Constitution. | | | 14| SECTION 4. NEW LAW A new section of law to be codified | | | 15|in the Oklahoma Statutes as Section 1119.3 of Title 12, unless there | | | 16|is created a duplication in numbering, reads as follows: | | | 17| A. There is hereby created a statutory cause of action against | | | 18|an insurer, except pursuant to an insurance policy providing for | | | 19|statutory workers' compensation benefits under the Administrative | | | 20|Workers' Compensation Act in Title 85A of the Oklahoma Statutes or | | | 21|the Workers' Compensation Code in Title 85 of the Oklahoma Statutes, | | | 22|if the action or actions of the insurer is in bad faith as defined | | | 23|by this act. | | | 24| | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 5 ___________________________________________________________________________
1| B. There is no requirement to exhaust any administrative | | | 2|remedies with the Oklahoma Insurance Department before filing an | | | 3|action asserting a cause of action for bad faith in a district | | | 4|court. | | | 5| C. A claimant under this section is entitled to a trial by | | | 6|jury. | | | 7| D. The issue of bad faith is always a question of fact which | | | 8|must be submitted to a jury. | | | 9| E. The duty of good faith and fair dealing is contained in | | | 10|every insurance contract and is a nondelegable duty. | | | 11| SECTION 5. NEW LAW A new section of law to be codified | | | 12|in the Oklahoma Statutes as Section 1119.4 of Title 12, unless there | | | 13|is created a duplication in numbering, reads as follows: | | | 14| A cause of action for bad faith created by this act shall lie | | | 15|if: | | | 16| 1. The insurer was required under the health insurance policy | | | 17|to pay the insured's claim; | | | 18| 2. The insurer's refusal to pay the claim was unreasonable or | | | 19|untimely under the circumstances related to the claim; | | | 20| 3. The insurer had no reasonable basis for the refusal, or the | | | 21|amount it offered to satisfy the claim was unreasonably low; or | | | 22| 4. The violation by the insurer of its duty of good faith and | | | 23|fair dealing was the direct cause of the injury sustained by the | | | 24|insured. | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 6 ___________________________________________________________________________
1| SECTION 6. NEW LAW A new section of law to be codified | | | 2|in the Oklahoma Statutes as Section 1119.5 of Title 12, unless there | | | 3|is created a duplication in numbering, reads as follows: | | | 4| A. If the insurer violates its duty or duties of good faith and | | | 5|fair dealing, the amount of damages shall be fixed as the amount of | | | 6|money that will compensate a first-party claimant or third-party | | | 7|beneficiary for any loss suffered as a result of the breach of the | | | 8|duty of good faith and fair dealing. | | | 9| B. In fixing the amount of damages, the jury may consider | | | 10|financial losses, emotional distress, embarrassment, loss of | | | 11|reputation, and mental pain and suffering. | | | 12| C. The jury may award punitive damages for the sake of example | | | 13|and by way of punishing the insurer based upon the following | | | 14|factors, in accordance with Section 9.1 of Title 23 of the Oklahoma | | | 15|Statutes: | | | 16| 1. The profitability of the misconduct to the insurer; | | | 17| 2. The duration of the misconduct and any concealment of it; | | | 18| 3. The attitude and conduct of the insurer upon discovery of | | | 19|the bad faith action; and | | | 20| 4. The financial condition of the insurer. | | | 21| D. Category I. Where the jury finds by clear and convincing | | | 22|evidence that an insurer has recklessly disregarded its duty to deal | | | 23|fairly and act in good faith with its insured; the jury, in a | | | 24|separate proceeding conducted after the jury has made such finding | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 7 ___________________________________________________________________________
1|and awarded actual damages, may award punitive damages in an amount | | | 2|not to exceed the greater of: | | | 3| 1. One Hundred Thousand Dollars ($100,000.00); or | | | 4| 2. The amount of the actual damages awarded. | | | 5| E. Category II. Where the jury finds by clear and convincing | | | 6|evidence that: | | | 7| 1. An insurer has acted intentionally and with malice towards | | | 8|others; or | | | 9| 2. An insurer has intentionally and with malice breached its | | | 10|duty to deal fairly and act in good faith with its insured. | | | 11| The jury, in a separate proceeding conducted after the jury has | | | 12|made such finding and awarded actual damages, may award punitive | | | 13|damages in an amount not to exceed the greatest of: | | | 14| a. Five Hundred Thousand Dollars ($500,000.00), | | | 15| b. twice the amount of actual damages awarded, or | | | 16| c. the increased financial benefit derived by the | | | 17| insurer as a direct result of the conduct causing the | | | 18| injury to the plaintiff and other persons or entities. | | | 19| F. Category III. Where the jury finds by clear and convincing | | | 20|evidence that: | | | 21| 1. An insurer has acted intentionally and with malice towards | | | 22|others; or | | | 23| 2. An insurer has intentionally and with malice breached its | | | 24|duty to deal fairly and act in good faith with its insured, and the | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 8 ___________________________________________________________________________
1|court finds, on the record and out of the presence of the jury, that | | | 2|there is evidence beyond a reasonable doubt that the insurer acted | | | 3|intentionally and with malice and engaged in conduct | | | 4|life-threatening to humans, the jury, in a separate proceeding | | | 5|conducted after the jury has made such finding and awarded actual | | | 6|damages, may award punitive damages in any amount the jury deems | | | 7|appropriate, without regard to the limitations set forth in | | | 8|subsections B and C of this section. Any award of punitive damages | | | 9|under this subsection awarded in any manner other than as required | | | 10|in this subsection shall be void and reversible error. | | | 11| G. In determining the amount, if any, of punitive damages to be | | | 12|awarded under either subsection B, C, or D of this section, the jury | | | 13|shall make the award based upon the factors set forth in subsection | | | 14|A of this section. | | | 15| H. Any award of punitive damages under this section awarded in | | | 16|any manner other than as required in this section shall be void and | | | 17|reversible error. | | | 18| SECTION 7. NEW LAW A new section of law to be codified | | | 19|in the Oklahoma Statutes as Section 1119.6 of Title 12, unless there | | | 20|is created a duplication in numbering, reads as follows: | | | 21| A cause of action for bad faith as provided for by this act | | | 22|requires analysis of the insurer's action and not the interpretation | | | 23|of any health insurance plan or how a health insurance plan relates | | | 24|to the claim. Any insurance contract issued in this state that | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 9 ___________________________________________________________________________
1|offers health insurance benefits shall not contain a provision | | | 2|purporting to reserve discretion to the insurer to interpret the | | | 3|terms of the contract. If an insurance contract contains such a | | | 4|provision, the provision is void. The interpretation of a health | | | 5|insurance plan shall not be a defense to a bad faith cause of | | | 6|action. | | | 7| SECTION 8. NEW LAW A new section of law to be codified | | | 8|in the Oklahoma Statutes as Section 1119.7 of Title 12, unless there | | | 9|is created a duplication in numbering, reads as follows: | | | 10| The causes of actions authorized in this act are in addition to, | | | 11|and do not limit or affect, other actions available by statute or | | | 12|common law, now or in the future. The statutory causes of action | | | 13|created by this act are in addition to the common law bad faith | | | 14|causes of action and in no way limit remedies or rights established | | | 15|by common law for the cause of action for breach of the duty of good | | | 16|faith and fair dealing under Oklahoma law. | | | 17| SECTION 9. This act shall become effective November 1, 2025. | | | 18|COMMITTEE REPORT BY: COMMITTEE ON RULES | |April 24, 2025 - DO PASS AS AMENDED | 19| | | | 20| | | | 21| | | | 22| | | | 23| | | | 24| | | | arsid4141778 SENATE FLOOR VERSION - HB2144 SFLR Page 10