Bill Text: NJ S2144 | 2018-2019 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: "New Jersey Insurance Fair Conduct Act."

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2018-06-11 - Received in the Assembly, Referred to Assembly Financial Institutions and Insurance Committee [S2144 Detail]

Download: New_Jersey-2018-S2144-Introduced.html

SENATE, No. 2144

STATE OF NEW JERSEY

218th LEGISLATURE

INTRODUCED MARCH 5, 2018

 


 

Sponsored by:

Senator  NICHOLAS P. SCUTARI

District 22 (Middlesex, Somerset and Union)

Senator  VIN GOPAL

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     "New Jersey Insurance Fair Conduct Act."

 

CURRENT VERSION OF TEXT

     As introduced.

 


An Act concerning certain unreasonable practices in the business of insurance and supplementing Title 17 of the Revised Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    This act shall be known and may be cited as the "New Jersey Insurance Fair Conduct Act."

 

     2.    As used in this act:

     "First-party claimant" or "claimant" means an individual, corporation, association, partnership or other legal entity asserting an entitlement to benefits owed directly to or on behalf of an insured under an insurance policy.

     "Insurer" means any individual, corporation, association, partnership or other legal entity which issues, executes, renews or delivers an insurance policy in this State, or which is responsible for determining claims made under the policy.

 

     3.    a.  In addition to the enforcement authority provided to the Commissioner of Banking and Insurance pursuant to the provisions of P.L.1947, c.379 (C.17:29B-1 et seq.) or any other law, a claimant may, regardless of any action by the commissioner, file a civil action in a court of competent jurisdiction against its insurer for:

     (1)  an unreasonable delay or unreasonable denial of a claim for payment of benefits under an insurance policy; or

     (2)  any violation of the provisions of section 4 of P.L.1947, c.379 (C.17:29B-4).

     b.    In any action filed pursuant to this act, the claimant shall not be required to prove that the insurer's actions were of such a frequency as to indicate a general business practice.

     c.     Upon establishing that a violation of the provisions of this act has occurred, the plaintiff shall be entitled to:

     (1)   actual damages caused by the violation of this act;

     (2)   prejudgment interest, reasonable attorney's fees, and all reasonable litigation expenses; and

     (3)   treble damages.

 

     4.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill, the "New Jersey Insurance Fair Conduct Act," establishes a private cause of action for first-party claimants regarding certain unfair or unreasonable practices by their insurer.

     Under the bill, a claimant may file a civil action in a court of competent jurisdiction against its insurer for:

     (1) an unreasonable delay or unreasonable denial of a claim for payment of benefits under an insurance policy; or

     (2) any violation of the provisions of section 4 of P.L.1947, c.379 (C.17:29B-4).

     Section 4 of P.L.1947, c.379 (C.17:29B-4) defines certain activities as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance including, among other things, misrepresentations and false advertising of policy contracts, false information and advertising generally, defamation, unfair discrimination, unfair claim settlement practices and failure to maintain complaint handling procedures.

     The bill provides that, in any action filed pursuant to the bill, the claimant shall not be required to prove that the insurer's actions were of such a frequency as to indicate a general business practice.

     The bill also provides that, upon establishing that a violation of the provisions of the bill has occurred, the claimant shall be entitled to:

     (1)   actual damages caused by the violation;

     (2)   prejudgment interest, reasonable attorney's fees, and all reasonable litigation expenses; and

     (3)   treble damages.

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