The proposed bill amends Arkansas Code Title 23, Chapter 89, Subchapter 2, by adding a new section, 23-89-218, which mandates that insurers include lienholders on payments made under motor vehicle insurance policies. Specifically, when an insured individual or a third-party claimant files a claim for damages to a motor vehicle that has an outstanding lien or encumbrance, the motor vehicle liability insurer is required to issue payment in the names of both the insured or claimant and the lienholder.

This legislation aims to ensure that lienholders are recognized in the payment process, thereby protecting their financial interests in the event of a claim. By requiring that payments be made jointly to both the insured and the lienholder, the bill seeks to prevent situations where lienholders may be left without compensation for their interests in the vehicle.