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

This legislation aims to protect the interests of lienholders by ensuring they are recognized in the payment process, thereby preventing potential disputes over insurance proceeds. By requiring that payments be made jointly to the insured or claimant and the lienholder, the bill seeks to enhance transparency and accountability in the handling of insurance claims related to motor vehicles.