To amend chapter 376, RSMo, by adding one new section relating to insurer's subrogation to rights of recovery of insured persons.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

     Section A. Chapter 376, RSMo, is amended by adding thereto one new section to be known as section 376.1400, to read as follows:

     376.1400. 1. Notwithstanding the provisions of section 376.777, RSMo, every insurance company, health services corporation and health maintenance organization authorized to transact the business of providing health and accident insurance coverage in this state, hereinafter referred to as the insurer, shall have the right to be compensated as provided in subsections 2 and 3 of this section, with respect to any insured or member covered under a group policy, contract or certificate, hereinafter referred to as "the insured", and to whom, or on behalf of whom, benefits are actually paid or services are provided on account of claims made for hospital, surgical, medical or health care services expenses due to bodily injury sustained by such insured as a result of the negligence of another person or entity.

     2. An insurer shall have a lien on benefits actually paid to or on behalf of the injured insured by any entity from any judgment, settlement, compromise or reimbursement due or paid to the insured as a result of the negligence of another person or entity. The procedure for recovery of benefits from any judgment, settlement, compromise or reimbursement shall be as follows:

     (1) When the insured engages legal representation to pursue recovery, the insured's insurer shall be notified by such insured or the legal representative of the insured. Proof of notification must be filed with any legal action taken by the insured within thirty days. Failure to file proof of notification shall be grounds for dismissal of the action without prejudice. After notification the insurer shall have ten days to file with the court a claim for lien rights under this section;

     (2) In any claim or suit brought on behalf of an insured, after the payment of the insured's attorney fees and costs, the balance of the recovery shall be apportioned as follows:

     (a) The insured shall receive the amount of any copayment or deductible paid by such insured;

     (b) The insurer shall receive a maximum of the total amount of benefits actually paid to or on behalf of the insured or fifty percent of the balance of the recovery, whichever is less; and

     (c) The insured shall receive the balance;

     (3) If there is a finding of comparative fault on the part of the insured, the recovery amounts provided for in paragraphs (a) and (b) of subdivision (2) of this subsection shall be reduced by the same percentage as the insured's comparative fault;

     (4) The insurer shall pay from his share of the recovery a proportionate share of the expenses of the recovery, including a reasonable attorney fee, which shall be equal to:

     (a) A percentage of the expenses and attorney fees equal to the amount of the insurer's recovery as compared to the total amount of recovery before attorney's fees and costs; or

     (b) A percentage of the insurer's recovery equal to the amount of the insurer's recovery as compared to the total amount of benefits actually paid to or on behalf of the insured, in the event that the insurer's recovery is limited to fifty percent of the balance as provided in paragraph (b) of subdivision 2.

     3. If the injured insured does not pursue recovery from the third party, and the insurer is put on notice from any source, such insurer shall be subrogated to the insured's right to bring suit against the third party at the insurer's expense, provided that the insurer obtains written consent of the insured. If a suit brought by the insurer on behalf of an insured results in a monetary recovery in excess of the amount of benefits actually paid to or on behalf of the insured, the insurer shall have the right to recover its legal fees and costs from the excess, and the insured shall receive the balance.

     4. Any amount of recovery made by an insurer under subsection 2 or 3 of this section shall be deducted from the amount of actual benefits paid or the cost incurred for services provided under the group policy, contract or certificate before the insurer next determines any change to the group policy holder's rates. This subsection shall only apply to groups whose ratings are based in whole or in part on the experience of that group.

     5. Every policy, contract or certificate providing group health and accident insurance coverage in this state shall contain the provision(s) that the insurer shall have the right to be compensated as provided in subsections 2 and 3 of this section. The form and content of such provision(s) shall be subject to the approval of the director of insurance.

     6. The right of subrogation granted to a workers' compensation insurance carrier pursuant to section 287.150, RSMo, shall be considered to have priority over the rights of recovery created by this section.