Note: This article is an update to the article which appeared in the March newsletter regarding Arizona Legislative Actions 2018.

The 53^rd Arizona Legislature began its Second Regular Session on January 8, 2017, and within the first two weeks, saw an introduction of more than 700 bills. This has been a busy legislative session. March 23, 2018, is the deadline for bills passing the House to be heard in a Senate standing committee and bills passing the Senate to be heard in a House standing committee. The proposed bills cover a wide variety of subjects with potential impact on insurance defense litigation.

Vehicle Liability Insurance

For the second time, a bill has been introduced to the Arizona Legislature raising the minimum limits for motor vehicle insurance policies. If approved, the bill would go into place after June 1, 2019. It would increase the minimum liability limits from $15,000/$30,000 to $25,000/$50,000.

A similar bill was introduced last session, but it failed because it did not receive a hearing. This session, a new lobbying team consisting of a coalition of plaintiffs’ personal injury lawyers is pushing the bill. The bill was approved by the Senate Transportation and Technology Committee. It was passed by the Arizona Senate and sent to the House Banking and Insurance Committee. On March 19, 2018, the Committee voted in favor of the proposed increased.

Medical Records

Ciox Health, through its lobbyist, requested State Representative, Heather Carter to introduce a bill establishing a fee schedule for searching, retrieving, and reproducing medical and billing records to third parties. As it stands today, under A.R.S. § 12-2295, a health care provider may charge a reasonable fee for the production of requested medical and payment records. Pursuant to the proposed bill, if approved, a fee schedule would go into place. The proposed fees were discussed by Ciox Health’s lobbyist, lobbyists for the Arizona Trial Lawyers and plaintiff’s personal injury attorneys. The proposed fees are as follows:

• $1.10 per page for the first 50 pages;
• $0.80 per page for 51 to 100 pages;
• $0.60 per page for more than 101 pages;
• $300.00 for records kept and delivered in electronic format;
• $1.75 per page for microfilm and microfiche format;
• $50.00 for x-rays, files, etc., delivered by CD or DVD;
• $10.00 per image for x-rays, films, etc.;
• $30.00 for search and retrieval charge per search;
• $15.00 certification charge;
• $15.00 charge for certification no records exist;

The proposed fees will significantly increase the cost in defending a claim. The reproduction cost of the medical records could potentially more than double the current costs. Also the lack of clarification regarding the $300 charge for the production of records kept in electronic format might allow the medical providers to charge $300 as a license charge any time electronic records are reproduced. There is also potential confusion whether the proposed bill would preempt other state laws and regulations which set limits on reproduction costs, such as limits established by the Industrial Commissions. These concerns were relayed to the lobbyist working on the specific bill.

The bill was assigned to the House Judiciary and Public Safety Committee and was awaiting a hearing. After learning of the concerns, it was determined the proposed bill would not be advancing further in the legislative sessions. The bill’s proponents intend to convene stakeholder meetings after the legislative session to work through the concerns.

Judgment Renewal

Currently, a judgment expires after five years. A bill has been introduced to extend the judgment renewal deadline from five years to ten years. The bill has the backing of the Arizona Creditors Bar Association and plaintiff’s personal injury attorneys. The House Judiciary and Public Safety Committee approved the bill. It was next passed in the House before moving onto the Senate Judiciary Committee which also approved the bill. The bill awaits further action in the Senate Committee of the Whole.

Construction Contracts Indemnity of Contracting Agent

The proposed bill would only allow a contracting agent to be indemnified for a contractor’s negligence. As it stands today, the law allows a contracting agent to require a contractor or subcontractor to indemnify the contracting agent for negligence so long as the contracting agent was not solely negligent. The proposed bill has the support of subcontractors, but is opposed by the homebuilders.

During the Senate Judiciary Committee hearing, an amendment was adopted which limits the bill to residential construction contracts only. The Senate Judiciary Committee approved the amended bill. While some reservation was expressed by Committee members in approving the bill, the Committee affirmed the bill to keep it alive in the legislative process.

Since approval by the Senate Judiciary Committee, new language was substituted into the proposed bill requesting the creation of a legislative study committee to work with stakeholders to sharpen the bill’s language. The intent is now to introduce another bill on this subject next year.

Confidentiality Agreements Involving Sexual Assault and Harassment Claims

A bill has been proposed which would make confidentiality agreements involving sexual assault and harassment claims void and unenforceable in certain cases. If the confidentiality agreement restricts the disclosure of factual information which is against the state’s public safety policy, the agreement would be considered void and unenforceable. The bill would prohibit an individual from entering a confidentiality agreement if the factual information is related to an allegation or attempted sexual harassment by an elected official.  The House Judiciary and Public Safety Committee approved the bill. The bill was passed in the House and sent to the Senate Judiciary Committee, which approved the bill. It now awaits action in the Senate Committee of the Whole.

Mandated Blood Alcohol and Drug Testing

Under this proposed bill, an officer would be under an order to require a person involved in a traffic accident resulting in death to submit to a blood alcohol or drug test if the officer has probable cause to believe the person caused the accident. The bill was passed in the Senate. It now awaits action in the House Judiciary and Public Safety Committee.

Penalties for Texting while Driving

The proposed bill would prohibit a person from using a portable wireless communication device to read, write, or send messages while operating a motor vehicle. Under the bill, an individual would be fined $99 for the first offense of texting and driving with a $200 fine for repeat offenses. If a person using a mobile device is involved in a mishap which causes death or serious injury, the offense can rise to a misdemeanor, in which case the maximum penalty would be four months in jail and a $4,000 fine.

The bill provides exceptions. It was amended to state the citations can be issued only if the texting was witnessed by a police officer or “established by other evidence.” The motorist would not be required to surrender their mobile device to a police officer. The Senate Transportation Committee approved the bill. It awaits further action in the Senate.

Further Updates to Follow

We will continue to monitor these bills and any newly introduced bills relevant to the insurance defense industry. Should you have any questions or like to discuss, do not hesitate to contact our office. We will be happy to speak with you.

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