Opinion ID: 2464109
Heading Depth: 1
Heading Rank: 3

Heading: statutory lien

Text: Arkansas Code Ann. § 23-89-207 (1987) provides: Insured's rights of reimbursement. (a) Whenever a recipient of § 23-89-202(1) and (2) benefits recovers in tort for injury, either by settlement or judgment, the insurer paying the benefits has a right of reimbursement and credit out of the tort recovery or settlement, less the cost of collection, as defined. (b) All cost of collection thereof shall be assessed against the insurer and insured in the proportion each benefits from the recovery. (c) The insurer shall have a lien upon the recovery to the extent of its benefit payments. This code provision grants an insurer, who has paid benefits to its insured under section 23-89-202(1) and (2), a lien upon, and a right of reimbursement from, any tort recovery or settlement obtained by its insured. See Northwestern Nat'l Ins. Co. v. Amer. States Ins. Co., 266 Ark. 432, 585 S.W.2d 925 (1979); Carnathan v. Farm Bureau Ins. Co., 288 Ark. 399, 705 S.W.2d 885 (1986). See also National Inv. Fire and Cas. Ins. Co. v. Edwards, 5 Ark.App. 42, 633 S.W.2d 41 (1982). This right of reimbursement is in the nature of subrogation. Northwestern Nat'l Ins. Co., supra . The underlying principle of subrogation rights is to avoid double recovery by the insured. Farm Bureau Mut. Ins. Co., supra . In this case, Hartford paid benefits to Daves under section 23-89-202(1) and (2), and Daves later settled with the tortfeasor and her insurer, Sentry, for $25,000. Under section 23-89-207, Hartford was entitled to a lien upon, and a right of reimbursement from, the settlement proceeds in the amount it paid in benefits to Daves, less its share of the costs of collection.