(TRENTON) — Bipartisan legislation Assemblyman Jack Conners sponsored to require additional oversight and reporting requirements for New Jersey’s insurance industry has received final legislative approval.
“When it comes to monitoring the actions taken by non-governmental agencies against insurers, the state has a bit of a blind spot,” said Conners (D-Camden). “To better protect consumers in a tightening insurance market, we must enhance our oversight.”
The Assemblyman said he drafted the legislation after learning that insurance companies in the state are not required to report administrative or disciplinary action taken by non-governmental regulatory agencies to the state Department of Banking and Insurance (DOBI). This gap in reporting allows unscrupulous insurance companies to slip under the radar.
Conners’ bill (A-1878) would expand the notification requirements of insurance providers operating in New Jersey and enhance the oversight powers of DOBI. Specifically, the measure would require any insurers licensed to operate in the state to provide DOBI with a report of any disciplinary action taken against the insurer by the Financial Industry Regulatory Authority or any other non-governmental regulatory authority within 30 days of the final outcome.
Insurers that fail to produce a report within the time allotted would face a temporary suspension of their license to sell insurance in New Jersey. The suspension would persist until DOBI receives the proper documentation and determines that the insurer has taken the appropriate actions to address the complaint. DOBI also would be authorized to assess fines to insurers that fail to provide appropriate documentation of disciplinary action: up to $10,000 for a first offense; up to $25,000 for a second offense; and up to $100,000 for all subsequent offenses.
“Giving DOBI the power to assess hefty fines and suspend insurers’ operating licenses during an investigation, rather than at the completion, will help to separate honest insurers from unscrupulous ones,” said Conners. “Think of it as insurance company quality assurance.”
The bipartisan measure was approved 78-0 by the Assembly in September 2008 and 37-0 by the Senate on Monday.
The bill is also sponsored by Assembly members Gary Chiusano (R-Sussex/Hunterdon/Morris) and Denise Coyle (R-Morris/Somerset). Sen. Christopher Bateman (R-Somerset) is the Senate sponsor.
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