SENATE, No. 2475

STATE OF NEW JERSEY

218th LEGISLATURE

INTRODUCED APRIL 12, 2018

 


 

Sponsored by:

Senator† STEPHEN M. SWEENEY

District 3 (Cumberland, Gloucester and Salem)

Senator† NELLIE POU

District 35 (Bergen and Passaic)

 

 

 

 

SYNOPSIS

†††† Prohibits application of fiduciary standard to insurance producers; specifies qualifications of persons providing affidavit of merit in lawsuits against insurance producers; and revises notification requirement with respect to certain producer compensation.

 

CURRENT VERSION OF TEXT

†††† As introduced.

††


An Act concerning insurance producers, supplementing P.L.2001, c.210 (C.17:22A-26 et seq.) and amending P.L.1995, c.139 and P.L.2008, c.38.

 

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

 

†††† 1.††† (New section)†††† a.†† Notwithstanding any law, rule, or regulation to the contrary, an insurance producer shall exercise ordinary care and skill in renewing, procuring, binding, or placing insurance coverage requested by an insured or prospective insured person or entity.

†††† b.††† A cause of action brought by any person or entity against an insurance producer concerning the sale, placement, procurement, renewal, binding or cancellation of, or the failure to procure, a policy of insurance, shall not subject the insurance producer to civil liability under standards governing the conduct of a fiduciary or a fiduciary relationship.

†††† c.†††† The provisions of this section shall not impair or invalidate any of the terms or conditions of a contractual agreement between an insurance producer and an insurer.

†††† d.††† The provisions of this section shall not limit or exempt an insurance producer from liability for negligence concerning the sale, placement, procurement, renewal, binding, or cancellation of, or the failure to procure, an insurance policy; or limit or prevent an insurance producer from asserting any defenses available at common law.

 

†††† 2.††† Section 2 of P.L.1995, c.139 (C.2A:53A-27) is amended to read as follows:

†††† 2.††† a.† In any action for damages for personal injuries, wrongful death or property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.† The court may grant no more than one additional period, not to exceed 60 days, to file the affidavit pursuant to this section, upon a finding of good cause.

†††† b.††† In the case of an action for medical malpractice, the person executing the affidavit shall meet the requirements of a person who provides expert testimony or executes an affidavit as set forth in section 7 of P.L.2004, c.17 (C.2A:53A-41).† In all other cases, the person executing the affidavit shall be licensed in this or any other state; have particular expertise in the general area or specialty involved in the action, as evidenced by board certification or by devotion of the person's practice substantially to the general area or specialty involved in the action for a period of at least five years.† The person shall have no financial interest in the outcome of the case under review, but this prohibition shall not exclude the person from being an expert witness in the case.

†††† c.†††† In the case of an action against a licensed insurance producer, regardless of damages sought, the person executing the affidavit pursuant to this section shall be licensed in this State; and have particular expertise in the general area or specialty involved in the action, as evidenced by a professional designation in the general area or specialty involved in the action and by devotion of the personís practice substantially to the general area or specialty involved in the action during the five years immediately preceding the date of the occurrence that is the basis for the claim or action.† The person shall have no financial interest in the outcome of the case under review, but this prohibition shall not exclude the person from being an expert witness in the case.

(cf: P.L.2004, c.17, s.8)

 

†††† 3.††† Section 25 of P.L.2008, c.38 (C.17:22A-41.1) is amended to read as follows:

†††† 25.† a. An insurance producer licensed pursuant to P.L.2001, c.210 (C.17:22A-26 et al.) who sells, solicits, or negotiates health [insurance policies or contracts] benefits plans to residents of this State shall notify the purchaser of the [insurance] health benefits plan, in writing, of the availability of information concerning the amount of any commission, service fee, brokerage, or other valuable consideration that the producer will receive as a result of the sale, solicitation or negotiation of the health [insurance policy or contract] benefits plan, which information shall be provided upon request.† [If the commission, fee, brokerage, or other valuable consideration is based on a percentage of premium, the insurance producer shall include that information in the notification to the purchaser.]

†††† b.††† The commissioner may [specify, by regulation, the information that shall be provided by an insurance producer in the notification to a purchaser of health insurance and the procedure for providing the notification] adopt, pursuant to the ďAdministrative Procedure Act,Ē P.L.1968, c.410 (C.52:14B-1 et seq.), any rules or regulations necessary to implement this section.

(cf: P.L.2008, c.38, s.25)

†††† 4.††† This act shall take effect immediately.

 

 

STATEMENT

 

†††† This bill requires insurance producers to exercise ordinary care and skill in issuing insurance policies.

†††† The bill also prohibits any cause of action by any person or entity against an insurance producer concerning the sale, placement, procurement, renewal, binding or cancellation of, or the failure to procure insurance, from subjecting the insurance producer to civil liability under standards governing the conduct of a fiduciary or a fiduciary relationship.

†††† The bill specifies that its provisions do not exempt an insurance producer from liability for negligence concerning the sale, placement, procurement, renewal, binding, or cancellation of, or the failure to procure, any insurance policy or limit or prevent a producer from asserting any defenses available at common law. †The bill provides that its provisions do not invalidate any agreement between an insurance producer and an insurer.†

†††† This bill also specifies the qualifications of a person providing an affidavit of merit in the case of an action against a licensed insurance producer, regardless of what damages may be sought.† The person must be licensed in this State; have particular expertise in the general area or specialty involved in the action, as evidenced by a professional designation in the general area or specialty involved in the action and by devotion of the personís practice substantially to the general area or specialty involved in the action during the five years immediately preceding the date of the occurrence that is the basis for the claim or action.† The person must have no financial interest in the outcome of the case under review, but this prohibition would not exclude the person from being an expert witness in the case.

†††† Finally, under current law, an insurance producer is required to notify the purchaser of health insurance, in writing, of the amount of any commission that the producer will receive as a result of the transaction.† Instead, this bill requires an insurance producer to notify a purchaser of a health benefits plan as to the availability of information concerning fees and commissions, which shall be provided upon request.