Senate Bill No. 234
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act prohibiting discrimination against victims of abuse in all lines of insurance; providing for an independent cause of action; amending section
33-18-242, MCA; and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Unfair discrimination against victims of abuse prohibited. (1) An insurer, health maintenance organization, or health service corporation may not, in any manner, engage in an unfair discriminatory act or practice against a victim of abuse.
(2) For purposes of this section, "abuse" means the occurrence of one or more of the following:
(a) purposely, knowingly, recklessly, or negligently subjecting or attempting to subject another person, including a minor child, to bodily injury, substantial emotional distress, psychological trauma, sexual assault, or sexual intercourse without consent;
(b) purposely or knowingly engaging in a course of conduct toward another person that constitutes stalking in violation of 45-5-220;
(c) subjecting another person, including a minor child, to false imprisonment or unlawful restraint or confinement; or
(d) purposely, knowingly, recklessly, or negligently causing or attempting to cause damage to property so as to intimidate or attempt to control the behavior of another person, including a minor child.
(3) The following acts are prohibited as unfairly discriminatory:
(a) denying, refusing to issue, renew, or reissue, canceling, or otherwise terminating an insurance policy, certificate of coverage, subscriber contract, or health care services agreement;
(b) restricting or excluding coverage under an insurance policy or certificate;
(c) adding a premium differential to any insurance policy or certificate on the basis that the applicant or insured has been the victim of abuse; or
(d) excluding or limiting coverage for losses or denying a claim incurred by an individual, insured, or participant as a result of abuse on the basis of the individual's, insured's, or participant's status as a victim of abuse.
(4) An insurer that takes an action that adversely affects a victim of abuse on the basis of a medical condition that the insurer knows or has reason to know is related to abuse shall explain the reason for its action to the applicant or insured in writing and must be able to demonstrate that its action and any applicable policy provisions:
(a) do not have the purpose or effect of treating abuse victim status as a medical condition or underwriting criterion;
(b) are not based upon any actual or perceived correlation between a medical condition and abuse victim status;
(c) are otherwise permissible by law and apply in the same manner and to the same extent to all applicants and insureds with similar medical conditions or property and casualty risk without regard to whether the condition or claim is related to abuse; and
(d) are based on a determination made in conformance with sound actuarial principles and supported by actual or reasonably anticipated experience that demonstrates a correlation between the medical condition or the type of property and casualty risk and a material increase in insurance risk.
(5) An applicant or insured claiming to be adversely affected by an act or practice of an insurer in violation of this section may maintain an action against the insurer. Upon proof of a violation of this section, the court may award appropriate relief, including temporary, preliminary, or permanent injunctive relief, compensatory and punitive damages, and costs including reasonable attorney and expert witness fees.
(6) (a) This section does not prohibit an insurer from underwriting, classifying risk, or administering a contract of insurance as otherwise allowed by law based on medical information that the insurer knows or should know is related to abuse as long as the insurer underwrites, classifies risk, or administers the contract of insurance on the basis of the applicant's or insured's medical condition and not on the applicant's or insured's status as a victim of abuse.
(b) This section does not prohibit or otherwise limit an insurer's ability to elicit information from or about an applicant's or insured's medical history as otherwise provided by law.
Section 2. Section 33-18-242, MCA, is amended to read:
"33-18-242. Independent cause of action -- burden of proof. (1) An insured or a third-party claimant has an
independent cause of action against an insurer for actual damages caused by the insurer's violation of
subsection 33-18-201(1), (4), (5), (6), (9), or (13) of 33-18-201 or [section 1].
(2) In an action under this section, a plaintiff is not required to prove that the violations were of such frequency as to indicate a general business practice.
(3) An insured who has suffered damages as a result of the handling of an insurance claim may bring an action against the insurer for breach of the insurance contract, for fraud, or pursuant to this section, but not under any other theory or cause of action. An insured may not bring an action for bad faith in connection with the handling of an insurance claim.
(4) In an action under this section, the court or jury may award
such damages as were proximately caused by the violation
of subsection 33-18-201(1), (4), (5), (6), (9), or (13) of 33-18-201 or [section 1]. Exemplary damages may also be assessed
in accordance with 27-1-221.
(5) An insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.
(6) (a) An insured may file an action under this section, together with any other cause of action that the insured has against
the insurer. Actions may be bifurcated for trial
where when justice so requires.
(b) A third-party claimant may not file an action under this section until after the underlying claim has been settled or a judgment entered in favor of the claimant on the underlying claim.
(7) The period prescribed for commencement of an action under this section is:
(a) for an insured, within 2 years from the date of the violation of 33-18-201 or [section 1]; and
(b) for a third-party claimant, within 1 year from the date of the settlement of or the entry of judgment on the underlying claim.
(8) As used in this section, an insurer includes a person, firm, or corporation utilizing self-insurance to pay claims made against them."
NEW SECTION. Section 3. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 33, chapter 18, part 2, and the provisions of Title 33, chapter 18, part 2, apply to [section 1].
NEW SECTION. Section 4. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
NEW SECTION. Section 5. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
NEW SECTION. Section 6. Effective date. [This act] is effective July 1, 1997.