Missouri Gov. Mike Parson signed House Bill 345 (HB 345) on June 29 to increase the number of parties who have a say in arbitration discussions.
Previously under Missouri law, an insurance company could only defend itself in a lawsuit but not in arbitration.
"Bringing much needed reform to section 537.065 was one of the Missouri Insurance Coalition’s top tort-reform priorities this year," Brandon Koch, executive director of the Missouri Insurance Coalition, told the St. Louis Record.
"House Bill 345 restores balance to the .065 process by closing the arbitration loophole that was previously denying insurers their statutory right to intervene and by providing meaningful intervention rights to insurers affected by .065 agreements and related civil actions."
Koch discussed the .065 process and other organizations that supported reforms.
"The broken .065 process imposed significant, at times multimillion-dollar, extra-contractual judgments on insurers that were far in excess of policy limits and not based in fact," Koch told the St. Louis Record. "These unexpected costs, in turn, could result in higher insurance premiums for consumers. That is why groups representing Missouri insureds and businesses, including the Missouri Civil Justice Reform Coalition, Associated Industries of Missouri, and the Missouri Chamber of Commerce were important allies in support of these significant .065 reforms."
Other organizations also came out in support of the bill.
“We’re grateful to the Missouri General Assembly for approving a measure that will reduce the abuse of arbitration agreements, prevent judgements not supported by evidence and ensure insurance carriers are given the opportunity to have their voice considered in arbitration discussions,” said Daniel P. Mehan, Missouri Chamber president and CEO. “House Bill 345 will also help prevent outlandish judgements that lead to higher premium costs for all Missourians. We appreciate Rep. Bruce DeGroot’s efforts to advance this important reform and thank Gov. Parson for giving it his signature.”
Prior to these reforms, insurance companies could only attend trials but not present evidence. HB 345 was sponsored by DeGroot and Missouri State Sen. Tony Luetkemeyer.