House bill would require prompt settlement payments; plaintiffs tell of months-long waits

Delegate Aaron Kaufman introduced HB 526, which would set a timetable for turning settlement agreements into payment: a proposed release within 15 days and payment within 30 days of the executed release in most cases (sponsor amendments extended some timelines).

"Once a settlement was reached, the defendant must provide a proposed release within a specified period and to pay all the sums with a defined time frame after execution of the release," Kaufman told the committee, describing the bill's goal as protecting plaintiffs who rely on timeliness for medical bills, rent and other urgent needs.

Victims and plaintiff attorneys described long delays when insurers or defense counsel postpone producing releases or issuing checks. Ansar Mila Abdullah told committee members his family waited a year for payment, a delay he said forced him to close his business and hampered his wife's medical care.

Defense witnesses — insurance trade groups, employer coalitions and hospitals — warned the committee HB 526's rigid timelines would disrupt structured settlements, make compliance with Medicare and other lien processes harder, and duplicate existing prompt-payment rules enforced by regulators. They asked the committee to exempt structured settlements and retain flexibility for multi-defendant or lien-intensive cases.

Proponents said amended language allows parties to negotiate different timelines when appropriate and suggested interest accruing on late payments as an incentive for prompt payment. The committee asked for additional drafting to address structured settlements, Medicare lien timing, and whether the Office of the Attorney General or regulator should play a role in enforcement.

Next steps: sponsors and opponents signaled willingness to negotiate targeted technical amendments; the committee requested fiscal and lien‑process analysis before further action.