Committee approves raising statutory insurer penalty from 12% to 25% in SB 350

Sen. Bryant and other sponsors presented Senate Bill 350 as a targeted change to increase the statutory sanction available to insureds when a court finds an insurer improperly denied coverage. The sponsor described the change as increasing the deterrent effect of the penalty: "It moves us from 12% recovered ... to 25%," he said.

Industry counsel warned the committee that raising the statutory penalty could have far‑reaching consequences for premiums and litigation exposure. Kevin Kress argued the existing 12% penalty, attorney fees and common‑law duties already provide meaningful sanctions and cautioned that a larger statutory penalty could be absorbed as a business cost or result in higher premiums.

Committee members debated the size and economic effect of the penalty but ultimately moved and voted to pass the bill. One senator recorded a 'No' at the roll (notation in the transcript), while the committee clerk stated "Ayes have it" and reported the bill passed out of committee.

Next steps: SB 350 will be reported to the Senate floor for further consideration; sponsors said they would continue to share supporting analyses with members before floor action.