|Financial responsibility limits increase and medical liability reform also signed|
CHICAGO - Indiana Governor Mike Pence has signed three bills that address longstanding issues before the legislature dealing with financial responsibility limits, litigation lending and medical liability.
Today the governor signed SEA 28 which provides for increases to the medical liability cap over the next few years. The governor also signed legislation yesterday, (HEA 1127) that will help curb abuses associated with litigation lending and a bill (SEA 40) that increases the state’s auto insurance financial responsibility limits for property from the current $10,000 to $25,000, effective July 1, 2017.
“The litigation lending fight in Indiana, which has gone on for several years has finally concluded with the enactment of HEA 1127,” said Hilary Segura, counsel, state government relations for the Property Casualty Insurers Association of America. “We commend Representative Lehman and Senator Head for their hard work on the issue and applaud the governor for signing it into law. The new requirements put in place safeguards to protect consumers from unreasonable interest rates and practices. These loans when not properly regulated can adversely impact the business and legal climate and drive up the cost of litigation.”
The litigation lending bill (HEA 1127) which was only finalized during the closing hours of the legislative session defines a Civil Proceeding Advance Payment “CPAP” transaction; provides for Department of Financial Institution oversight; specifies that CPAP transactions are subject to the UCCC; establishes a 36% APR cap on loan interest; a 7% cap on service fee interest; a $250 cap on processing fees for loans below $5000; and a $500 cap on processing fees for loans above $5,000.
After much legislative debate, medical liability reform legislation (SEA 28) was passed and signed by the governor today. “This new law updates the payment cap for the first time since 1998 by $400,000,” said Segura. “The new total, maximum compensation will be $1.65 million in 2017, and increases to $1.8 million in 2019. The increase in the payment cap is intended to protect the constitutionality of the current system.”