The New Jersey Assembly Financial Institutions and Insurance Committee on Jan. 9 amended Senate Bill 2144, which would allow policyholders to sue insurance companies for unfair practices, and its companion Assembly Bill 4293, down to just one line of automotive coverage and removed the call for triple damages for violations.
Known as the New Jersey Insurance Fair Conduct Act, the bill has been actively opposed by insurers.
A statement by the Professional Insurance Agents (PIA) claimed credit for working to “ensure that insurance producers would not be brought into lawsuits for actions for which they had no control."
"These efforts were successful when an amendment was added to the bill little more than a month after it was introduced, specifically excluding producers from the definition of insurers that is found in this bill,” the statement said.
Although the amended bill passed the committee in a unanimous 10-0 vote, several committee members refused to support the bill outright, emphasizing their affirmative votes were cast solely in order to get the bill in front of the entire assembly.
This lack of support was expressed despite the amendment’s reduction of potential damages and limiting scope to only apply to uninsured/underinsured motorist coverage.
Although Committee Chairman John McKeon (D – West Orange) voted yes from a belief the bill deserved to advance to the full assembly, he does not support the bill’s current form because he worries it will chip away at the current insurance system.
While he acknowledged there are cases where the insurer had taken “somewhat advantage” of paying claimants the limits of their policy, he expressed the near certainty most claims don’t result in such a negative experience.
McKeon expressed concern the threat of verdicts could lead insurers to pay out undeserved claims which could, in turn, drive up insurance premiums and present a challenge for policyholders.
Insisting the bill is “pro-consumer” and “strong,” sponsor Assemblywoman Joann Downey (D – Freehold Township) contended consumers shouldn’t be blamed for higher premiums merely because they want to be treated fairly.
Assemblywoman Yvonne Lopez (D – Perth Amboy) also shared reservations about higher premiums, as did Assemblyman Joe Danielsen (D – Somerset), who argued there’s no “bilateral” protection---the legal costs associated with an insurer winning a lawsuit could be distributed among policyholders. He was hopeful future amendments will make the bill more palatable in assembly.
Assemblyman Roy Freiman (D – Hillsborough), Committee Vice-Chairwoman Pamela Lampitt (D – Cherry Hill) and Assemblywoman BettyLou DeCroce (R – Parsippany) all voted in favor of advancing that bill forward to the full 80-member assembly, but they each expressed reservations and did not commit to voting in favor of the bill once it reaches the floor.
Assemblyman Robert Auth (R – Old Tappan) abstained from voting as he waits to review amendments before deciding where he falls on the issue.
Assemblyman Gary Schaer (D – Passaic) voted yes in absentia, while unequivocal votes in the affirmative were cast by Assemblyman Jon Bramnick (R – Plainfield) and sponsor Assemblywoman Annette Quijano (D – Elizabeth.)