ASSEMBLY, No. 119
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman JONES
An Act concerning certain fraudulent insurance practices and amending and supplementing P.L.1983, c.320.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) Notwithstanding any other provision of law to the contrary and excluding information given for rating purposes, a contract or policy of motor vehicle insurance issued or delivered in this State shall be void , with respect to the first party coverages of the named insured and any person holding a security interest in the motor vehicle, from the date the contract or policy was purchased or renewed or from the annual anniversary date of the contract or policy, whichever date occurs later; any premium paid therefor shall be forfeited for the current policy term; and the named insured shall be liable for any claims paid by the insurer under the contract or policy, from the date the contract or policy was purchased or renewed or from the annual anniversary date of the contract or policy, whichever date occurs later, if the named insured or a person acting in concert with, or with the knowledge of, the named insured:
a. Presents, prepares or makes, or causes to be presented to any insurance company, as part of, or in support of, any written or oral statement including computer-generated documents or data when making application for coverage or renewal or providing information, or filing a claim for payment or other benefit pursuant to an insurance policy, knowing that such statement contains any false or misleading information concerning any fact or thing material to that application, claim or benefit; or
b. Conceals or knowingly fails to disclose as part of, or in support of, an application for coverage or renewal, a request by the insurance company for information, a claim for payment or other benefit pursuant to an insurance policy, any material fact or thing that affects: (1) any person's initial or continued right or entitlement to any insurance benefit or payment; or (2) the amount of any benefit or payment to which the person is entitled.
2. Section 6 of P.L.1983, c.320 (C.17:33A-6) is amended to read as follows:
6. a. Insurance claim forms shall contain a statement in a form approved by the commissioner that clearly states in substance the following: "Any person who knowingly files a statement of claim containing any false or misleading information is subject to criminal and civil penalties."
b. (Deleted by amendment, P.L.1987, c.342.)
c. Insurance application forms for motor vehicle policies and renewal forms shall contain [a statement] the following statements in 10-point, boldface type, in a form approved by the commissioner that clearly [states] and conspicuously state in substance the following: (1) "Any person who knowingly makes an application for motor vehicle insurance coverage containing
any statement that the applicant resides or is domiciled in this State when, in fact that applicant resides or is domiciled in a state other than this State, is subject to criminal and civil penalties;" and (2) "This contract or policy shall be void with respect to the first party coverages of the named insured and any person holding a security interest in the motor vehicle, from the date the contract or policy was purchased or renewed or from the annual anniversary date of the contract or policy, whichever date occurs later ; any premium paid therefor shall be forfeited for the current policy term; and the named insured shall be liable for any claims paid by the insurer under the contract or policy from the date the contract or policy was purchased or renewed or from the annual anniversary date of the contract or policy, whichever date occurs later , if the person making application for coverage knowingly presents, prepares or makes, or causes to be presented to his insurer any written or oral statement containing any false or misleading information."
d. No initial policy of motor vehicle insurance shall be issued until an applicant has personally signed: (1) the application form for motor vehicle insurance coverage; and (2) a statement, in a form approved by the commissioner, that conforms to the provisions of paragraph (2) of subsection c. of this section and additionally states that by the applicant's signature he attests to the fact that he has read that statement and fully understands its meaning and the importance of his statements being true and correct, to the best of his knowledge, since the insurance company may rely upon such information in the issuance of any policy.
(cf: P.L.1991, c.331, s.4)
3. This act shall take effect on the 180th day after enactment , but the Commissioner of Insurance may take such anticipatory administrative action in advance as shall be necessary to effectuate the purposes of the act .
STATEMENT
This bill amends and supplements the "New Jersey Insurance Fraud Prevention Act." The bill, provides that a motor vehicle insurance policy shall be void with respect to the first party coverages of the named insured and any person holding a security interest in the motor vehicle, from the date the policy was purchased or renewed or from the annual anniversary date of the policy, whichever date occurs later; any premium paid therefor forfeited for the current policy term; and the named insured shall be liable for any claims paid by the insurer under the policy, from the date the policy was purchased or renewed or from the annual anniversary date of the policy, whichever date occurs later, if the person making application for coverage or providing information to an insurer knowingly makes any false or misleading statement, either orally or in writing, except for information given for rating purposes.
The bill also requires insurance companies to print, clearly and conspicuously, in 10-point boldface type, a statement to that effect on all application forms and renewal forms. The bill further requires an applicant for an initial motor vehicle insurance policy to personally sign the insurance application form and a statement certifying that he understands the meaning of the printed warning statement before the insurance policy can be issued.
Provides that first party motor vehicle insurance coverage shall be void, premium forfeited, and insured liable for claims paid by insurer, if certain information is falsified.