Bill > H4733

This bill establishes the "Bad Faith Presumption in Insurance Settlement Offer Act" to protect insureds when insurance companies unreasonably refuse to settle claims within policy limits. The bill creates a legal presumption of bad faith against an insurance company if three specific conditions are met: a settlement agreement is executed by all parties to resolve a claim within policy limits, the insurer is notified but refuses to accept the settlement, and the case subsequently goes to trial resulting in a judgment exceeding policy limits. The insurer can rebut this presumption by providing evidence that their refusal to settle was reasonable, such as having a valid legal defense or lacking critical information at the time of the proposed settlement. Importantly, the bill defines key terms like "bad faith," "claimant," and "policy limits," and specifies that any settlement agreement can only be used in subsequent bad faith actions, not in the original liability case. The legislation aims to incentivize insurers to act in good faith during settlement negotiations and protect insureds from potential financial risks when reasonable settlement opportunities are available. The bill will take effect upon approval by the Governor and includes a severability clause to ensure that if any part of the act is found unconstitutional, the remaining provisions will remain valid.

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https://www.scstatehouse.gov/billsearch.php?billnumbers=4733&session=126&summary=B