(TRENTON) — Assemblyman Jack Conners’ new law requires additional oversight and reporting requirements for New Jersey’s insurance industry.
“When it comes to monitoring the actions taken by non-governmental agencies against insurers, the state had a bit of a blind spot,” said Conners (D-Camden). “To better protect consumers in a tightening insurance market, we enhanced our oversight.”
The Assemblyman said he drafted the legislation after learning that insurance companies in the state were 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 allowed unscrupulous insurance companies to slip under the radar.
Conners’ law (A-1878 from the 2008-09 legislative session) expands the notification requirements of insurance providers operating in New Jersey and enhances the oversight powers of DOBI. Specifically, the measure requires 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 face a temporary suspension of their license to sell insurance in New Jersey.
The suspension persists until DOBI receives the proper documentation and determines that the insurer has taken the appropriate actions to address the complaint. DOBI also is 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.”
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