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Missouri Tort Reform Brings Fairness to Claims Settlement Process

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July 19, 2017

Missouri has taken important steps toward improving its legal climate with the enactment of comprehensive insurance tort reform legislation, SS/SCS/HCS/HB 339 and 714,1 according to the Property Casualty Insurers Association of America (PCI). This bill will help curb the abuses associated with Mo. Rev. Stat. § 537.065 and the time-limited demand settlement process.

Under this process, an injured party and the insurance policyholder can work together to obtain a judgment exceeding the insured's policy limits through an uncontested trial. The insurance company's hands are tied as they generally are limited to disputing only the legal conclusion of whether coverage existed and typically barred from relitigating any other aspect of the suit.

This legislation is designed to modify the § 537.065 settlement agreement process so that insurers may intervene in the underlying lawsuit as a matter of right and limits entry into a § 537.065 agreement to insureds whose insurers have declined coverage or refused to defend them without reservation. Additionally, the bill establishes standards for time-limited demands. Time-limited demand letters are often used by plaintiffs' lawyers to "set up" insurers for bad faith failure to settle claims.

"The standards contained within this bill allow insurers a reasonable minimum level of information about a claim before they are forced to make a settlement decision that could expose them to 'bad faith' liability," said Hilary Segura, counsel, state government relations for PCI. "This legislation brings greater fairness to the claims settlement process by allowing insurers the opportunity to make a reasonable claims decision before being faced with unlimited tort liability."

See another recent Captive.com news story with a Missouri connection, "John Huff, Previously NAIC President, Joins Dentons."


  1. Senate Substitute for Senate Committee Substitute for House Committee Substitute for House Bill Nos. 339 and 714.
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