Senate Commerce Committee Statement to Senate, No. 1559 - New Jersey Insurance Fair Conduct Act

Summary

A Senate Commerce Committee statement to Senate, No. 1559 with committee amendments, State of New Jersey, dated January 21, 2021. The committee reports Senate Bill No. 1559 favorably and with committee amendments. As amended, the bill, the "New Jersey Insurance Fair Conduct Act," establishes a private cause of action for first-party claimants regarding certain unfair or unreasonable practices by an insurer. The statement says a claimant may file a civil action against an automobile insurer for an unreasonable delay or unreasonable denial of a claim for payment of benefits, and may be entitled to actual damages. It states that the committee amended the bill to remove the provision for prejudgment interest, reasonable attorney's fees, and all reasonable litigation expenses.

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     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 1559
                   with committee amendments



 STATE OF NEW JERSEY
                    DATED: JANUARY 21, 2021

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1559.
   As amended, this bill, the “New Jersey Insurance Fair Conduct
Act,” establishes a private cause of action for first-party claimants
regarding certain unfair or unreasonable practices by their insurer.
   The bill defines “insurer” to mean any individual, corporation,
association, partnership or other legal entity which issues, executes,
renews or delivers an insurance policy in this State, or which is
responsible for determining claims made under the policy. Under
the bill, the term “insurer” does not include an insurance producer
as defined by P.L.2001, c.210 (C.17:22A-28) or a public entity.
   A final party claimant means an individual injured in a motor
vehicle accident and entitled to the uninsured or underinsured
motorist coverage of an insurance policy asserting an entitlement to
benefits owed directly to or on behalf of an insured under that
policy.
   Pursuant to the bill, a claimant may file a civil action in a court
of competent jurisdiction against its automobile insurer for:
   (1) an unreasonable delay or unreasonable denial of a claim for
payment of benefits under an insurance policy; or
   (2) any violation of the provisions of section 4 of
P.L.1947, c.379 (C.17:29B-4).
   Section 4 of P.L.1947, c.379 (C.17:29B-4) defines certain
activities as unfair methods of competition and unfair and deceptive
acts or practices in the business of insurance including, among other
things, unfair claim settlement practices and failure to maintain
complaint handling procedures.
   The bill provides that, in any action filed pursuant to the bill, the
claimant shall not be required to prove that the insurer’s actions
were of such a frequency as to indicate a general business practice.
   The bill also provides that, upon establishing that a violation of
the provisions of the bill has occurred, the claimant shall be entitled
to actual damages caused by the violation including, but not limited
to, actual trial verdicts.
                                 2

COMMITTEE AMENDMENTS:
    The committee amended the bill to remove the provision that
entitles a claimant that establishes a violation of the provisions of the
bill to prejudgment interest, reasonable attorney’s fees, and all
reasonable litigation expenses.


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