## Facts

- Jeweral Wayne O’Bar, the named insured under an automobile policy issued by MFA Mutual Insurance Company, died in a motor vehicle accident while driving his employer’s truck within the scope of his employment.
- His widow and child received workers’ compensation death benefits exceeding $5,000.
- O’Bar’s auto policy included a $5,000 accidental-death benefit.
- The policy also contained a “reduction of amount payable” clause stating the accidental-death benefit would be reduced by amounts paid or payable under workers’ compensation or similar laws.
- MFA denied payment, asserting the workers’ compensation recovery reduced the accidental-death benefit to zero.
- The case was submitted on cross-motions for summary judgment; the trial court upheld the reduction clause and entered summary judgment for MFA.
- The beneficiaries appealed, arguing the reduction clause violated Arkansas public policy under the state’s no-fault automobile insurance statutes.

## Issues

1. Whether Arkansas no-fault automobile insurance statutes permit an insurer to reduce a required accidental-death benefit by amounts received under workers’ compensation.
2. Whether a contractual reduction clause eliminating accidental-death benefits based on workers’ compensation payments is void as against public policy.

## Decision

- The Arkansas Supreme Court reversed the summary judgment for MFA.
- The court held the reduction clause void as against public policy to the extent it reduced accidental-death benefits by workers’ compensation payments.
- The beneficiaries were entitled to recover the full $5,000 accidental-death benefit under the policy.

## Legal Principles

- Statutorily mandated no-fault benefits cannot be diminished by contract in a manner that conflicts with legislative design and public policy.
- Under Arkansas’s no-fault scheme, insurers are expressly permitted to reduce or seek reimbursement for medical and income disability benefits, but not for accidental-death benefits.
- When a statute authorizes offsets for specified categories of benefits and omits others, courts will not infer an offset right for the omitted category through policy language.
- Accidental-death benefits under the no-fault statute function as a fixed sum payable upon death and are not subject to workers’ compensation offsets absent explicit statutory authorization.

## Conclusion

The court invalidated a policy provision that offset no-fault accidental-death coverage by workers’ compensation benefits, holding that Arkansas law authorizes offsets only for certain no-fault benefits and does not permit insurers to contractually reduce required accidental-death benefits.


O’Bar v. MFA Mut. Ins. Co., 275 Ark. 247, 628 S.W.2d 561 (Ark. 1982)