St. Louis Record

Saturday, November 16, 2019

Legislation closing loophole in O65 agreements a priority next legislative session, insurance advocate says


By Karen Kidd | Aug 7, 2019

The Missouri State Capitol, currently undergoing a full exterior renovation |

JEFFERSON CITY – Legislation that would provide insurers with more say in arbitration hearings and ways to avoid excessive payouts to plaintiffs did not advance in the last legislative session but will be a top priority next year, an insurance industry expert recently said.

"It definitely is our desire to bring it up again in the coming session," Missouri Insurance Coalition Executive Director Brandon Koch said.

Senate Bill 49, had it made it out of the state Senate and to the governor's desk, would have closed a loophole generated by reforms of Missouri's Section 537.065 agreements, often called O65 agreements, when fair settlements legislation, House Bills 339 and 714, became law in in 2017, Koch said.

Missouri state Sen. Caleb Rowden (R-Columbia), sponsor of Senate Bill 49 |

Trial lawyers have found a way around fair settlements reforms, Koch said.

SB 49, sponsored by Missouri state Sen. Caleb Rowden (R-Columbia), bars enforcement of arbitration awards against insurers unless the insurer agrees to the arbitration process in writing. An insurer who elects not to participate in arbitration will not be acting in bad faith and an insurer who intervenes in a court proceeding in which a defendant tries to limit his or her liability will have the same rights as any other defendant, according to provisions in the bill.

SB 49 did not make it out of the state Senate this session.

"It was ready for floor debate in the Senate," Koch said. "It did not cross chambers but it was ready to be brought up for debate."

An important component in legislation to close the fair settlements loophole would be to provide for insurance companies' rights in arbitration, Koch said.

"We don't want to be just an observer," he said. "We want to be able to at least present facts."

SB 49 would help address those concerns and close the existing loophole to allow insurance companies to present evidence "and to have our day in court," Koch said.

The measure will be one of Missouri Insurance Coalition's top priorities next legislative session, which begins in January, Koch said.

"Tort reform is very important to us," he said. "Anything that will level the playing field and allow us to operate in an environment where there are not these restrictions or excessive costs that come with excessive litigation. We want to operate in a fair and competitive marketplace."

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