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Scutari and Gopal Bill to Establish the ‘New Jersey Insurance Fair Conduct Act’ Approved by the Senate

TRENTON – Legislation sponsored by Senate Judiciary Chair Nicholas Scutari and Senator Vin Gopal that would establish the “New Jersey Insurance Fair Conduct Act” was cleared by the Senate today.

“With this bill, we are trying to give consumers the protection they deserve from the unfair business practices of insurance companies,” said Senator Scutari (D-Union/Middlesex/Somerset).  “Too often people are taken advantage of and can’t fight back.  Our bill allows for consumers to have the ability to fight back.”

“There is an inherent conflict of interest between profit motives of insurers and the interests of the insured,” said Senator Gopal (D-Monmouth).  “We need to install safeguards in our insurance system so the insured receive what they are owed in a prompt and fair manner.”

The bill, S-2144, would establish a private cause of action for first-party claimants regarding certain unfair or unreasonable practices by their insurer. Under the bill, a claimant may file a civil action for unreasonable delay or unreasonable denial of a claim for payment of benefits under an insurance plan, or for any violation of current law concerning unfair methods of competition and unfair and deceptive acts in the insurance business.

Current law defines certain activities as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance, including, but not limited to misrepresentations and false advertising of policy contracts, false information and advertising generally, defamation, unfair discrimination, unfair claim settlement practices and failure to maintain complaint handling procedures.

The bill was approved by the Senate with a vote of 21-14, and next heads to the Assembly for further consideration.