74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 277
Senate Bill 255
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Judiciary)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Modifies provisions under which motor vehicle liability insurer
is responsible to second insurer for reimbursement of personal
injury protection benefits.
A BILL FOR AN ACT
Relating to reimbursement of personal injury protection benefits;
creating new provisions; and amending ORS 742.534, 742.536 and
742.538.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 742.534 is amended to read:
742.534. (1) { + (a) + } Except as provided in ORS 742.544,
{ - every - } { + an + } authorized motor vehicle liability
insurer whose insured is or would be held legally liable for
damages for injuries sustained in a motor vehicle accident by a
person for whom personal injury protection benefits have been
furnished by { - another such - } { + a second motor vehicle
liability + } insurer, or for whom benefits have been furnished
by an authorized health insurer, shall reimburse { - such
other - } { + the second + } insurer for the benefits
{ - it - } { + the second insurer + } has { - so - }
furnished if { - it - } { + the second insurer:
(A) + } Has requested { - such - } reimbursement { - , - }
{ + ;
(B) + } Has not given notice as provided in ORS 742.536 that
{ - it - } { + the second insurer + } elects recovery by lien
in accordance with
{ - that section - } { + ORS 742.536; + } and
{ + (C) + } Is entitled to reimbursement under this
{ - section - } { + subsection + } by the terms of
{ - its - } { + the second insurer's + } policy.
{ + (b) + } Reimbursement under this subsection, together
with the amount paid to injured persons by the liability insurer,
{ - shall - } { + may + } not exceed the limits of the policy
issued by the { + liability + } insurer.
(2) In calculating { - such - } { + the + } reimbursement
{ + required under subsection (1) of this section + }, the
amount of benefits { - so - } furnished shall be diminished in
proportion to the amount of negligence attributable to the person
for whom benefits have been
{ - so - } furnished, and the reimbursement { - shall - }
{ + may + } not exceed the amount of damages legally recoverable
by the person.
(3) Disputes between insurers as to { - such - } issues of
liability and the amount of reimbursement required by this
section shall be decided by arbitration.
(4) Findings and awards made in { - such - } an arbitration
proceeding { + held under subsection (3) of this section + } are
not admissible in any action at law or suit in equity.
{ + (5) If a second insurer has not requested reimbursement
from a liability insurer under subsection (1) of this section,
the second insurer:
(a) Must seek reimbursement under ORS 742.536 or 742.538; and
(b) Is responsible for the second insurer's proportionate share
of expenses, costs and attorney fees incurred by the injured
person in obtaining a settlement or judgment in connection with
the recovery that the amount of benefits furnished bears to the
amount of the total recovery.
(6) Notwithstanding the limits of the policy issued by the
liability insurer, if a second insurer requests reimbursement
under subsection (1) of this section and the liability insurer
fails to reimburse the second insurer, the liability insurer is
liable to the second insurer or an authorized health insurer for
the amount of the personal injury protection benefits furnished
by the second insurer, unless the limits of the policy have been
exhausted by the payment of damages to or on behalf of other
injured persons. + }
SECTION 2. ORS 742.536 is amended to read:
742.536. (1) When an authorized motor vehicle liability insurer
has furnished personal injury protection benefits, or an
authorized health insurer has furnished benefits, for a person
injured in a motor vehicle accident, if { - such - }
{ + the + } injured person makes { + a + } claim, or institutes
legal action, for damages for { - such - } { + the + }
injuries against any person, { - such - } { + the + } injured
person shall give notice of { - such - } { + the + } claim or
legal action to the insurer by personal service or by registered
or certified mail. Service of a copy of the summons and complaint
or copy of other process served in connection with { - such
a - } { + the + } legal action shall be sufficient notice to
the insurer, in which case a return showing service of
{ - such - } { + the + } notice shall be filed with the clerk
of the court but shall not be a part of the record except to give
notice.
(2) The insurer may elect to seek reimbursement as provided in
this section for benefits it has { - so - } furnished, out of
any recovery under { - such - } { + the + } claim or legal
action, if the insurer has not { + requested reimbursement under
ORS 742.534 or + } been a party to an interinsurer reimbursement
proceeding with respect to { - such - } { + the + } benefits
under ORS 742.534 and is entitled by the terms of its policy to
the benefit of this section. The insurer shall give written
notice of { - such - } { + the + } election within 30 days
from the receipt of notice or knowledge of { - such - }
{ + the + } claim or legal action to the person making
{ + a + } claim or instituting legal action and to the person
against whom { + a + } claim is made or legal action instituted,
by personal service or by registered or certified mail. In the
case of a legal action, a return showing service of
{ - such - } { + the + } notice of election shall be filed
with the clerk of the court but { - shall - } { + is + } not
{ - be - } a part of the record except to give notice to the
claimant and the defendant of the lien of the insurer.
(3) If the insurer { - so serves such - } { + serves + }
written notice of election and, where applicable, { - such - }
{ + the + } return is { - so - } filed:
(a) The insurer has a lien against { - such - } { + the + }
cause of action for benefits it has { - so - } furnished, less
the proportion, not to exceed 100 percent, of expenses, costs and
attorney fees incurred by the injured person in connection with
the recovery that the amount of the lien before { - such - }
{ + the + } reduction bears to the amount of the recovery.
(b) The injured person shall include as damages in
{ - such - } { + the + } claim or legal action the benefits
{ - so - } furnished by the insurer.
(c) In the case of a legal action, the action shall be taken in
the name of the injured person.
(4) As used in this section, 'makes { + a + } claim' or 'claim
' refers to a written demand { + that is + } made and delivered
for a specific amount of damages and { - which - }
{ + that + } meets other requirements reasonably established by
the director's rule.
SECTION 3. ORS 742.538 is amended to read:
742.538. { + (1) + } If a motor vehicle liability insurer has
furnished personal injury protection benefits, or { - a - }
{ + an authorized + } health insurer has furnished benefits, for
a person injured in a motor vehicle accident, and the
interinsurer reimbursement benefit of ORS 742.534 is not
available under the terms of { - that section - } { + ORS
742.534 + }, and the insurer has not elected recovery by lien as
provided in ORS 742.536, { - and is entitled by the terms of
its policy to the benefit of this section - } { + the insurer
may seek reimbursement for the benefits the insurer has furnished
as follows + }:
{ - (1) The insurer is entitled to the proceeds of any
settlement or judgment that may result from the exercise of any
rights of recovery of the injured person against any person
legally responsible for the accident, to the extent of such
benefits furnished by the insurer less the insurer's share of
expenses, costs and attorney fees incurred by the injured person
in connection with such recovery. - }
{ - (2) The injured person shall hold in trust for the
benefit of the insurer all such rights of recovery which the
injured person has, but only to the extent of such benefits
furnished. - }
{ - (3) The injured person shall do whatever is proper to
secure, and shall do nothing after loss to prejudice, such
rights. - }
{ + (a) If the injured person has obtained a settlement
against any person alleged to be legally liable for the accident
or a judgment against any person found to be legally liable for
the accident, the insurer may recover the amount of benefits
furnished by the insurer less an amount that equals a
proportionate share of the expenses, costs and attorney fees
incurred by the injured person in connection with the recovery
that the amount of benefits furnished bears to the amount of the
total recovery. + }
{ - (4) - } { + (b) If the injured person has not obtained
a settlement or judgment against any person who may be legally
liable and does not intend to make a claim or institute legal
action for damages, the injured person must hold in trust for the
benefit of the insurer all rights of recovery that the injured
person has and do whatever is proper to secure, and do nothing
after loss to prejudice, those rights. + } If requested in
writing by the insurer, the injured person shall take, through
any representative not in conflict in interest with the injured
person designated by the insurer, { - such - } { + any + }
action as may be necessary or appropriate to recover
{ - such - } { + the + } benefits furnished as damages from
{ - such - } { + a + } responsible person { + . + } { - ,
such action to be - } { + Any action + } taken in the name of
the injured person { - , but - } { + shall be taken + } only
to the extent of the benefits furnished by the insurer. { - In
the event of a recovery, the insurer shall also be reimbursed out
of such recovery for the injured person's share of expenses,
costs and attorney fees incurred by the insurer in connection
with the recovery. - } { + If the injured person agrees with
the insurer, the action may include damages that the injured
person is legally entitled to recover from the person who is
legally liable. The injured person and the insurer shall share
the expenses, costs and attorney fees incurred in connection with
the recovery in proportion to:
(A) The amount of the recovery if the injured person receives a
recovery; or
(B) The amount of the recovery sought in the claim if the
injured person does not receive a recovery. + }
{ - (5) In calculating respective shares of expenses, costs
and attorney fees under this section, the basis of allocation
shall be the respective proportions borne to the total recovery
by: - }
{ - (a) Such benefits furnished by the insurer; and - }
{ - (b) The total recovery less (a). - }
{ - (6) The injured person shall execute and deliver to the
insurer such instruments and papers as may be appropriate to
secure the rights and obligations of the insurer and the injured
person as established by this section. - }
{ - (7) - } { + (2) + } Any provisions in a motor vehicle
liability insurance policy or health insurance policy giving
rights to the insurer relating to subrogation or the subject
matter of this section shall be construed and applied in
accordance with the provisions of this section.
SECTION 4. { + The amendments to + } { + ORS 742.534,
742.536 and 742.538 by sections 1 to 3 of this 2007 Act apply to
motor vehicle liability insurance policies issued or renewed on
or after the effective date of this 2007 Act. + }
----------