The proposed bill mandates that motor vehicle liability insurers include lienholders in payments made under insurance policies when a claim is filed for damages to a motor vehicle. Specifically, it introduces a new section to the Arkansas Code, designated as 23-89-218, which stipulates that if there is an outstanding lien or encumbrance on the vehicle, the insurer must issue payment in the names of both the insured or third-party claimant and the lienholder.

This legislative change aims to ensure that lienholders are recognized and compensated appropriately in the event of a claim, thereby protecting their financial interests in the insured vehicle. By requiring insurers to include lienholders in the payment process, the bill seeks to streamline claims and reduce potential disputes between insured parties and lienholders.