NEW JERSEY CONTEMPLATES AN ADDITIONAL CAUSE OF ACTION FOR CLAIMANTS SUBJECTED TO UNFAIR CLAIM PRACTICES

The tens of thousands of property and casualty claims related to Sandy’s wrath, along with the thousands of complaints state regulators, legislators, and the Governor’s office have received from frustrated claimants, have resulted in proposed legislation and regulatory action. The new legislation has been named the Consumer Protection Act of 2012. Please click the first link in the bottom section of this page to see copies of the legislation introduced in the NJ Senate, and recently in the NJ Assembly, to create a private right of action for bad faith claims practices regarding property, and casualty insurance policies or contracts. Senator Scutari is the primary sponsor – his district covers Monmouth, Somerset, and Union Counties, with Monmouth suffering significant losses as a result of Sandy. The bill is quite ambitious – it seeks to become law immediately upon adoption – normally a roll out period is necessary to put the parties impacted by the legislation on notice of the law’s provisions. The legislature can make a civil remedy retroactive; when the Legislature has clearly indicated that a statute should be given retroactive effect, the courts will give it that effect-unless it will violate the constitution or result in a manifest injustice. Baldwin v. Newark, 38 N.J.L. 158, 159 (Sup.Ct.1895); see Gibbons v. Gibbons, 86 N.J. 515, 522-23, 432 A.2d 80 (1981); Howard Savings Inst. v. Kielb, 38 N.J. 186, 193, 183 A.2d 401 (1962). State, Dept. of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 498, 468 A.2d 150, 163 (1983) Similar efforts to create a private right of action have failed in the past, but there may be enough agitation from Sandy to carry this through. Governor Christie’s sentiments regarding delays in claim payments for homes destroyed or badly damaged by Sandy would indicate that he’ll sign it if it is passed. A copy of the Press Release from Tuesday, February 5, 2013 (click the second link at the bottom of this page), which coordinated with the DOBI order referenced below, shows the scope of the problem and the Governor’s sentiments. The New Jersey Department of Banking and Insurance (DOBI) is feeling the pressure to demand action from insurers on Sandy claims, and entered the attached order (A-13-104) (please see the third link down below) on Tuesday, as well as shortening the time period for a carrier to respond to an inquiry from DOBI to five business days, down from the normal 15. LINKS

1. New Jersey Consumer Protection Act 2012
2. Governor Christie’s Press Release
3. New Jersey Department of Banking and Insurance A-13-104

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