SENATE, No. 2195
STATE OF NEW JERSEY
INTRODUCED JUNE 12, 1997
By Senators LESNIAK, SINGER, Adler, Sinagra, MacInnes, Lipman, Lynch, Codey, O'Connor, Girgenti, Casey, Bryant, McGreevey, Zane, Baer and Sacco
An Act establishing the position of Insurance Fraud Prosecutor in the Department of Banking and Insurance.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding the provisions of P.L.1944, c.20 (C.52:17A-1 et seq.) or any other law, rule or regulation to the contrary, there is created the position of Insurance Fraud Prosecutor in the Department of Banking and Insurance. The Insurance Fraud Prosecutor shall be appointed by and serve at the pleasure of the Governor, with the advice and consent of the Senate.
2. The Insurance Fraud Prosecutor shall have access to the support and resources of the Department of Banking and Insurance, including, without limitation, such clerical and support staff as may be necessary to discharge his responsibilities, and access to those units within the Department of Law and Public Safety, Department of Human Services and Department of Health and Senior Services established to enforce the criminal and civil laws with respect to insurance fraud.
3. a. The Insurance Fraud Prosecutor shall establish a coordinated insurance fraud enforcement policy, shall prosecute insurance fraud and shall oversee the prosecution of enforcement actions in priority cases.
b. In furtherance of these responsibilities, the Insurance Fraud Prosecutor shall have the following powers and obligations:
(1) The Insurance Fraud Prosecutor shall have access to all information concerning insurance fraud enforcement which is in the possession of all State agencies. Such information includes agency inspection reports and license information, individual case files, and intelligence information compiled and maintained by the Divisions of State Police and Criminal Justice.
(2) The Insurance Fraud Prosecutor shall meet on a regular basis with representatives of all State departments and agencies with insurance fraud enforcement responsibilities: (a) to identify individual matters as priority cases; (b) to set specific goals and strategies for the most effective resolution of each such case, whether by criminal, civil or administrative enforcement action or some combination thereof; and (c) to formulate and evaluate proposals for legislative, administrative and judicial initiatives to strengthen insurance fraud enforcement and to further a coordinated enforcement policy.
(3) The Insurance Fraud Prosecutor shall prosecute insurance fraud and shall oversee the processing, progress and prosecution of individual priority cases. He shall work with the Directors of the Divisions of Law and Criminal Justice when these matters are receiving, or should receive, the attention of the Attorney General. He shall also work through the heads of other departments and agencies to oversee administrative enforcement activities in priority cases which do not involve direct Attorney General attention.
(4) In connection with insurance fraud enforcement activities, the Insurance Fraud Prosecutor shall act as the liaison for the Executive Branch of government with agencies involved in insurance fraud enforcement outside the Executive Branch, including federal agencies and the judiciary.
4. All departments and agencies of State government with insurance fraud enforcement responsibilities are hereby directed to cooperate with and to support fully the Insurance Fraud Prosecutor in the discharge of his responsibilities and obligations.
5. a. The Director of the Division of Budget and Accounting in the Department of the Treasury shall, on or before September 1 in each year, ascertain and certify to the Commissioner of Banking and Insurance the total amount of expenses incurred by the State in connection with the administration of this act during the preceding fiscal year, which expenses shall include, in addition to the direct cost of personal service, the cost of maintenance and operation, the cost of retirement contributions made and the workers' compensation paid for and on account of the position of Insurance Fraud Prosecutor, rentals for space occupied in State owned or State leased buildings and all other direct and indirect costs associated with the duties and responsibilities of the Insurance Fraud Prosecutor.
b. The commissioner shall, on or before October 15 in each year, apportion the amount so certified to him among all of the companies writing the class or classes of insurance described in Subtitle 3 of Title 17 of the Revised Statutes (C.17:17-1 et seq.), and Subtitle 3 of Title 17B of the New Jersey Statutes (C.17B:17-1 et seq.), within this State in the proportion that the net premiums received by each of them for such insurance written or renewed on risks within this State during the calendar year immediately preceding, as reported to him, bears to the sum total of all such net premiums received by all companies writing that insurance within the State during the year, as reported. The commissioner shall certify the sum apportioned to each company on or before November 15 next ensuing, and to the Division of Taxation in the Department of the Treasury. Each company shall pay the amount so certified as apportioned to it to the Division of Taxation on or before December 31 next ensuing, and the sum paid shall be paid into the State Treasury in reimbursement to the State for the expenses paid.
"Net premiums received" means gross premiums written, less return premiums thereon and dividends credited or paid to policyholders.
c. Direct and indirect costs associated with the position of Insurance Fraud Prosecutor shall be apportioned among insurance companies pursuant to subsection b. of this section notwithstanding the provisions of P.L.1995, c.156 (C.17:1C-20 et seq.).
6. The Insurance Fraud Prosecutor shall report to the Governor after six months of service, and at reasonable and appropriate intervals thereafter, as to the progress of his work and as to whether any further administrative and legislative action would be desirable to assist in the discharge of his duties.
7. This act shall take effect immediately.
STATEMENT
This bill establishes a special Insurance Fraud Prosecutor and is necessary to insure that perpetrators of insurance fraud are prosecuted to the fullest extent of the law. Currently, many such perpetrators often avoid criminal prosecution because they are channeled instead through an administrative settlement process within the Department of Banking and Insurance and the Department of Law and Public Safety. This bill provides the resources necessary to insure that these individuals are justly punished and that others are deterred from committing insurance fraud offenses, which only add additional dollars to the insurance premiums of all the citizens of this State.
Establishes position of Insurance Fraud Prosecutor in DOBI.