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By D. Michael Bush, Esq.
CALIFORNIA
Several years ago, California voters passed the “Victim’s Bill of Rights”. The bill, in part, allowed a judge to order the criminal defendant to pay restitution to the victim. There was some confusion in the past as to whether insurance companies could be considered to be victims. Judges are now taking the position that restitution awards can be made to insurance companies, but it would be helpful if the legislature would make this clear.
Insurance carriers should be alert to this relatively easy way to recover monies that have been paid out. Generally the probation department should notify the carriers of the possible recovery. The carriers can participate in a restitution hearing. If a payment schedule is agreed to and not followed through, then the defendant could go to jail.
Recently AB 817 was signed into law. A restitution award can be enforceable as a money judgment. There is a rebuttable presumption that a parent is jointly and severally liable for the amount the minor is obligated to pay. Make sure the parent is notified of the restitution hearing.
SB 950, the “seize and freeze” bill is now law. If a defendant is charged with $500,000 or more in connection with a fraud, the prosecutor can freeze the defendant’s accounts under certain conditions.
SB 465 strengthens the fight against capping. No longer can a prevailing defendant get attorney’s fees, but a successful plaintiff can; that is, one who is suing the criminal. Private parties injured by capping activities can sue for double damages. In a related matter, a local judge recently held that a doctor could not be prosecuted under the capping provisions of Ins. Code 750, but only under Business and Professions Code 650. This is another area that could use some clarification by the legislature.
The legislature failed to restrict actions for damages for drunken and uninsured drivers. Insurance commissioner Charles Quackenbush has indicated he might bring an initiative to the voters.
The Physical Therapy Examining Committee did not change the supervision requirements for physical therapy assistants, nor change the documentation requirements. There may be more on this in 1996.
Did you know that according to Business and Professions Code 6149.5 carriers are to provide written notice to third party claimants when a settlement draft is issued in excess of $100. But the section expressly rejects the creation of a cause of action against the insurer or the creation of a defense for any party based upon the failure of the insurer to provide notice.
WISCONSIN
SB 631 is an interesting pending bill. Those who report insurance fraud activity to authorized agencies or carriers, without malice, not only would be immune from liability, but would be able to seek attorneys fees if s/he were wrongfully sued. That would be a powerful weapon.
NOTES
People are getting together task forces or talking about fraud laws in Alabama, Maine and Oregon. Dennis Jay, executive director of the Coalition Against Insurance Fraud, recently testified in front of the Ohio Insurance task force that insurance fraud has “crept into the heartland.” Years ago, many were saying that insurance fraud was analogous to cancer.
Oklahoma and West Virginia will try once again in 1996 to pass anti-fraud legislation.
As always, if you have questions or comments, or would like a copy of a bill, you can contact me at:
Bush, Koppel and Schweizer
D. Michael Bush
100 Oceangate 1000
Long Beach, California 90802
Compuserve: 70413,2125
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