SENATE, No. 893

STATE OF NEW JERSEY

216th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION

 


 

Sponsored by:

Senator  JENNIFER BECK

District 11 (Monmouth)

Senator  JEFF VAN DREW

District 1 (Atlantic, Cape May and Cumberland)

 

 

 

 

SYNOPSIS

     Clarifies DOBI’s regulatory authority over certain flood insurance claims.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning flood insurance and supplementing P.L.1947, c.379 (C.17:29B-1 et seq.).

 

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

 

     1.    Notwithstanding any law, rule or regulation to the contrary, the provisions of P.L.1947, c.379 (C.17:29B-1 et seq.) shall apply to an insurer licensed to do business in the State administering or handling claims of insurance under the National Flood Insurance Program’s “Write Your Own” program established pursuant to 42 U.S.C. s.4081.

 

     2.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill clarifies that the provisions of P.L.1947, c.379 (C.17:29B-1 et seq.), which concern unfair methods of competition or unfair or deceptive acts or practices in the business of insurance, apply to insurers licensed to do business in the State administering or handling claims of insurance under the National Flood Insurance Program’s “Write Your Own” program, established in connection with the National Flood Insurance Program (“NFIP”). The provisions of P.L.1947, c.379 (C.17:29B-1 et seq.) provide that, committed with enough frequency to indicate a business practice, it is an unfair and deceptive practice to fail to attempt in good faith to effectuate the prompt, fair and equitable settlements of claims of insurance.

     The NFIP is a federal program administered by the Federal Emergency Management Agency (“FEMA”). Although the program is a federal program, the flood insurance itself can be purchased from and the claims may be administered by private insurance companies who participate in FEMA’s “Write Your Own” program.  The bill is intended to clarify that insurers licensed by the State are subject to regulation by the Department of Banking and Insurance under P.L.1947, c.379 (C.17:29B-1 et seq.) in the handling of those flood insurance claims.

     In light of the devastation and widespread flood damage caused by Hurricane Sandy, it is the sponsor’s intent to provide effective and stringent oversight of the handling of flood claims by State licensed insurers in order to ensure the prompt, fair and equitable settlement of those claims.