workers' compensation; loss
adjustment expenses
DP |
Committee on Commerce and Economic Development |
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DP |
Caucus and COW |
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X |
Third Read |
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As Passed the House |
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HB 2276 requires a benefits deductible endorsement to specify whether loss adjustment expenses are to be considered as advancements that are reimbursed by the employer.
Current Status
HB 2276 passed the Commerce and Economic Development Committee unamended. HB 2276 passed Committee of the Whole unamended.
Laws 1993, Chapter 156, provided authority for insurance carriers who transact workers' compensation insurance business in Arizona to offer deductible coverage to employers. There must be a benefits deductible endorsement attached to the policy, and the policyholder must choose only one deductible amount. The insurance carrier pays the compensable claim for benefits and related costs. The employer then reimburses the carrier for any deductible amount paid by the carrier.
Current law does not specifically authorize payment for Allocated Loss Adjustment Expenses (ALAE), which are claims handling expenses attributed to a particular claim file. Examples of ALAE include independent medical exams (IME), payments for related outside attorney fees, and fees for obtaining police/medical reports.
Currently 44 other states allow their policyholders and insurance carriers the option to include ALAE within the limits of the deductible. HB 2276 provides comparable statutory authorization.