17:29B-4 LEGISLATIVE HISTORY CHECKLIST Compiled by the NJ State Law Library LAWS OF: 2001 CHAPTER: 168 NJSA: 17:29B-4 (Prohibits court complaint requirement for insurance claims) BILL NO: S78 (Substituted for A3224) SPONSOR(S): Zane DATE INTRODUCED: Pre-filed COMMITTEE: ASSEMBLY: Banking and Insurance SENATE: Commerce AMENDED DURING PASSAGE: No DATE OF PASSAGE: ASSEMBLY: June 14, 2001 SENATE: March 26, 2001 DATE OF APPROVAL: July 26, 2001 FOLLOWING ARE ATTACHED IF AVAILABLE: FINAL TEXT OF BILL (Original version of bill enacted) S78 SPONSORS STATEMENT: (Begins on page 6 of original bill) Yes COMMITTEE STATEMENT: ASSEMBLY: Yes SENATE: Yes FLOOR AMENDMENT STATEMENTS: No LEGISLATIVE FISCAL ESTIMATE: No A3224 SPONSORS STATEMENT: (Begins on page 6 of original bill) Yes Bill and Sponsors Statement identical to S78 COMMITTEE STATEMENT: ASSEMBLY: Yes Identical to Senate Statement to S78 SENATE: No FLOOR AMENDMENT STATEMENTS: No LEGISLATIVE FISCAL ESTIMATE: No VETO MESSAGE: No GOVERNOR’S PRESS RELEASE ON SIGNING: Yes FOLLOWING WERE PRINTED: To check for circulating copies, contact New Jersey State Government Publications at the State Library (609) 278-2640 ext.103 or mailto:refdesk@njstatelib.org REPORTS: No HEARINGS: No NEWSPAPER ARTICLES: No SENATE, No. 78 STATE OF NEW JERSEY 209th LEGISLATURE PRE-FILED FOR INTRODUCTION IN THE 2000 SESSION Sponsored by: Senator RAYMOND J. ZANE District 3 (Salem, Cumberland and Gloucester) SYNOPSIS Prohibits insurers from requiring filing of municipal court complaint as precondition to payment of certain claims. CURRENT VERSION OF TEXT Introduced Pending Technical Review by Legislative Counsel. S78 ZANE 2 1 AN ACT concerning unfair insurance claim settlement practices and 2 amending P.L.1947, c.379. 3 4 BE IT ENACTED by the Senate and General Assembly of the State 5 of New Jersey: 6 7 1. Section 4 of P.L.1947, c.379 (C.17:29B-4) is amended to read 8 as follows: 9 4. The following are hereby defined as unfair methods of 10 competition and unfair and deceptive acts or practices in the business 11 of insurance: 12 (1) Misrepresentations and false advertising of policy contracts. 13 Making, issuing, circulating, or causing to be made, issued or 14 circulated, any estimate, illustration, circular or statement 15 misrepresenting the terms of any policy issued or to be issued or the 16 benefits or advantages promised thereby or the dividends or share of 17 the surplus to be received thereon, or making any false or misleading 18 statement as to the dividends or share of surplus previously paid on 19 similar policies, or making any misleading representation or any 20 misrepresentation as to the financial condition of any insurer, or as to 21 the legal reserve system upon which any life insurer operates, or using 22 any name or title of any policy or class of policies misrepresenting the 23 true nature thereof, or making any misrepresentation to any 24 policyholder insured in any company for the purpose of inducing or 25 tending to induce such policyholder to lapse, forfeit, or surrender his 26 insurance. 27 (2) False information and advertising generally. Making, 28 publishing, disseminating, circulating, or placing before the public, or 29 causing, directly or indirectly, to be made, published, disseminated, 30 circulated, or placed before the public, in a newspaper, magazine or 31 other publication, or in the form of a notice, circular, pamphlet, letter 32 or poster, or over any radio station, or in any other way, an 33 advertisement, announcement or statement containing any assertion, 34 representation or statement with respect to the business of insurance 35 or with respect to any person in the conduct of his insurance business, 36 which is untrue, deceptive or misleading. 37 (3) Defamation. Making, publishing, disseminating, or circulating, 38 directly or indirectly, or aiding, abetting or encouraging the making, 39 publishing, disseminating or circulating of any oral or written 40 statement or any pamphlet, circular, article or literature which is false, 41 or maliciously critical of or derogatory to the financial condition of an 42 insurer, and which is calculated to injure any person engaged in the 43 business of insurance. EXPLANATION - Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and intended to be omitted in the law. Matter underlined thus is new matter. S78 ZANE 3 1 (4) Boycott, coercion and intimidation. Entering into any 2 agreement to commit, or by any concerted action committing, any act 3 of boycott, coercion or intimidation resulting in or tending to result in 4 unreasonable restraint of, or monopoly in, the business of insurance, 5 or resulting in or tending to result in unreasonable influence being 6 exerted upon any producer that has an in-force contract as of the 7 effective date of P.L.1997, c.151 (C.17:33B-64 et al.) for the purpose 8 of replacing the in-force contract with a UEZ agent contract pursuant 9 to section 22 of P.L.1997, c.151 (C.17:33C-4). 10 (5) False financial statements. Filing with any supervisory or other 11 public official, or making, publishing, disseminating, circulating or 12 delivering to any person, or placing before the public, or causing 13 directly or indirectly, to be made, published, disseminated, circulated, 14 delivered to any person, or placed before the public, any false 15 statement of financial condition of an insurer with intent to deceive. 16 Making any false entry in any book, report or statement of any 17 insurer with intent to deceive any agent or examiner lawfully appointed 18 to examine into its condition or into any of its affairs, or any public 19 official to whom such insurer is required by law to report, or who was 20 authorized by law to examine into its condition or into any of its 21 affairs, or, with like intent, willfully omitting to make a true entry of 22 any material fact pertaining to the business of such insurer in any 23 book, report or statement of such insurer. 24 (6) Stock operations and advisory board contracts. Issuing or 25 delivering or permitting agents, officers, or employees to issue or 26 deliver, agency company stock or other capital stock, or benefit 27 certificates or shares in any common-law corporation, or securities or 28 any special or advisory board contracts or other contracts of any kind 29 promising returns and profits as an inducement to insurance. 30 (7) Unfair discrimination. (a) Making or permitting any unfair 31 discrimination between individuals of the same class and equal 32 expectation of life in the rates charged for any contract of life 33 insurance or of life annuity or in the dividends or other benefits 34 payable thereon, or in any other of the terms and conditions of such 35 contract. 36 (b) Making or permitting any unfair discrimination between 37 individuals of the same class and of essentially the same hazard in the 38 amount of premium, policy fees, or rates charged for any policy or 39 contract of accident or health insurance or in the benefits payable 40 thereunder, or in any of the terms or conditions of such contract, or in 41 any other manner whatsoever. 42 (c) Making or permitting any discrimination against any person or 43 group of persons because of race, creed, color, national origin or 44 ancestry of such person or group of persons in the issuance, 45 withholding, extension or renewal of any policy of insurance, or in the 46 fixing of the rates, terms or conditions therefor, or in the issuance or S78 ZANE 4 1 acceptance of any application therefor. 2 (d) Making or permitting discrimination in the use of any form of 3 policy of insurance which expresses, directly or indirectly, any 4 limitation or discrimination as to race, creed, color, national origin or 5 ancestry or any intent to make any such limitation or discrimination. 6 (e) Making or permitting any unfair discrimination solely because 7 of age in the issuance, withholding, extension or renewal of any policy 8 or contract of automobile liability insurance or in the fixing of the 9 rates, terms or conditions therefor, or in the issuance or acceptance of 10 any application therefor, provided, that nothing herein shall be 11 construed to interfere with the application of any applicable rate 12 classification filed with and approved by the commissioner pursuant to 13 P.L.1944, c. 27 (C.17:29A-1 to 17:29A-28), or any amendment or 14 supplement thereof, which is in effect with respect to such policy or 15 contract of insurance. 16 (8) Rebates. (a) Except as otherwise expressly provided by law, 17 knowingly permitting or offering to make or making any contract of 18 life insurance, life annuity or accident and health insurance, or 19 agreement as to such contract other than as plainly expressed in the 20 contract issued thereon, or paying or allowing, or giving or offering to 21 pay, allow, or give, directly or indirectly, as inducement to such 22 insurance, or annuity, any rebate of premiums payable on the contract, 23 or any special favor or advantage in the dividends or other benefits 24 thereon, or any valuable consideration or inducement whatsoever not 25 specified in the contract; or giving, or selling, or purchasing or 26 offering to give, sell, or purchase as inducement to such insurance or 27 annuity or in connection therewith, any stocks, bonds, or other 28 securities of any insurance company or other corporation, association, 29 or partnership, or any dividends or profits accrued thereon, or 30 anything of value whatsoever not specified in the contract. 31 (b) Nothing in clause 7 or paragraph (a) of this clause 8 shall be 32 construed as including within the definition of discrimination or 33 rebates any of the following practices (i) in the case of any contract of 34 life insurance or life annuity, paying bonuses to policyholders or 35 otherwise abating their premiums in whole or in part out of surplus 36 accumulated from nonparticipating insurance; provided, that any such 37 bonuses or abatement of premiums shall be fair and equitable to 38 policyholders and for the best interests of the company and its 39 policyholders; (ii) in the case of life insurance policies issued on the 40 industrial debit plan, making allowance to policyholders who have 41 continuously for a specified period made premium payments directly 42 to an office of the insurer in an amount which fairly represents the 43 saving in collection expense; (iii) readjustment of the rate of premium 44 for a group policy based on the loss or expense experience thereunder, 45 at the end of the first or any subsequent policy year of insurance 46 thereunder, which may be made retroactive only for such policy year. S78 ZANE 5 1 (9) Unfair claim settlement practices. Committing or performing 2 with such frequency as to indicate a general business practice any of 3 the following: 4 (a) Misrepresenting pertinent facts or insurance policy provisions 5 relating to coverages at issue; 6 (b) Failing to acknowledge and act reasonably promptly upon 7 communications with respect to claims arising under insurance 8 policies; 9 (c) Failing to adopt and implement reasonable standards for the 10 prompt investigation of claims arising under insurance policies; 11 (d) Refusing to pay claims without conducting a reasonable 12 investigation based upon all available information; 13 (e) Failing to affirm or deny coverage of claims within a reasonable 14 time after proof of loss statements have been completed; 15 (f) Not attempting in good faith to effectuate prompt, fair and 16 equitable settlements of claims in which liability has become 17 reasonably clear; 18 (g) Compelling insureds to institute litigation to recover amounts 19 due under an insurance policy by offering substantially less than the 20 amounts ultimately recovered in actions brought by such insureds; 21 (h) Attempting to settle a claim for less than the amount to which 22 a reasonable man would have believed he was entitled by reference to 23 written or printed advertising material accompanying or made part of 24 an application; 25 (i) Attempting to settle claims on the basis of an application which 26 was altered without notice to, or knowledge or consent of the insured; 27 (j) Making claims payments to insureds or beneficiaries not 28 accompanied by a statement setting forth the coverage under which the 29 payments are being made; 30 (k) Making known to insureds or claimants a policy of appealing 31 from arbitration awards in favor of insureds or claimants for the 32 purpose of compelling them to accept settlements or compromises less 33 than the amount awarded in arbitration; 34 (l) Delaying the investigation or payment of claims by requiring an 35 insured, claimant or the physician of either to submit a preliminary 36 claim report and then requiring the subsequent submission of formal 37 proof of loss forms, both of which submissions contain substantially 38 the same information; 39 (m) Failing to promptly settle claims, where liability has become 40 reasonably clear, under one portion of the insurance policy coverage 41 in order to influence settlements under other portions of the insurance 42 policy coverage; 43 (n) Failing to promptly provide a reasonable explanation of the 44 basis in the insurance policy in relation to the facts or applicable law 45 for denial of a claim or for the offer of a compromise settlement; 46 (o) Requiring insureds or claimants to institute or prosecute S78 ZANE 6 1 complaints regarding motor vehicle violations in the municipal court 2 as a condition of paying private passenger automobile insurance 3 claims. 4 (10) Failure to maintain complaint handling procedures. Failure of 5 any person to maintain a complete record of all the complaints which 6 it has received since the date of its last examination. This record shall 7 indicate the total number of complaints, their classification by line of 8 insurance, the nature of each complaint, the disposition of these 9 complaints, and the time it took to process each complaint. For 10 purposes of this subsection, "complaint" shall mean any written 11 communication primarily expressing a grievance. 12 (11) The enumeration of this act of specific unfair methods of 13 competition and unfair or deceptive acts and practices in the business 14 of insurance is not exclusive or restrictive or intended to limit the 15 powers of the commissioner or any court of review under the 16 provisions of section 9 of this act. 17 (cf: P.L.1997, c.151, s.29) 18 19 2. This act shall take effect on the 90th day after the date of 20 enactment. 21 22 23 STATEMENT 24 25 This bill makes it an unfair claim practice for an insurance company 26 to require insureds or claimants to file or prosecute complaints 27 regarding motor vehicle violations in municipal court as a condition of 28 payment of private passenger automobile insurance claims. SENATE COMMERCE COMMITTEE STATEMENT TO SENATE, No. 78 STATE OF NEW JERSEY DATED: JANUARY 9, 2001 The Senate Commerce Committee reports favorably Senate Bill No. 78. This bill makes it an unfair claim practice for an insurance company to require insureds or claimants to file or prosecute complaints regarding motor vehicle violations in municipal court as a condition of payment of private passenger automobile insurance claims. This bill was pre-filed for introduction in the 2000-2001 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed. ASSEMBLY BANKING AND INSURANCE COMMITTEE STATEMENT TO SENATE, No. 78 STATE OF NEW JERSEY DATED: MAY 3, 2001 The Assembly Banking and Insurance Committee reports favorably Senate Bill No. 78. This bill makes it an unfair claim practice for an insurance company to require insureds or claimants to file or prosecute complaints regarding motor vehicle violations in municipal court as a condition of payment of private passenger automobile insurance claims. This bill is identical to Assembly Bill No. 3224 which was also reported by the committee. SENATE, No. 78 STATE OF NEW JERSEY 209th LEGISLATURE PRE-FILED FOR INTRODUCTION IN THE 2000 SESSION Sponsored by: Senator RAYMOND J. ZANE District 3 (Salem, Cumberland and Gloucester) Co-Sponsored by: Assemblymen Geist and Bateman SYNOPSIS Prohibits insurers from requiring filing of municipal court complaint as precondition to payment of certain claims. CURRENT VERSION OF TEXT As reported by the Senate Commerce Committee with technical review. (Sponsorship Updated As Of: 6/15/2001) S78 ZANE 2 1 AN ACT concerning unfair insurance claim settlement practices and 2 amending P.L.1947, c.379. 3 4 BE IT ENACTED by the Senate and General Assembly of the State 5 of New Jersey: 6 7 1. Section 4 of P.L.1947, c.379 (C.17:29B-4) is amended to read 8 as follows: 9 4. The following are hereby defined as unfair methods of 10 competition and unfair and deceptive acts or practices in the business 11 of insurance: 12 (1) Misrepresentations and false advertising of policy contracts. 13 Making, issuing, circulating, or causing to be made, issued or 14 circulated, any estimate, illustration, circular or statement 15 misrepresenting the terms of any policy issued or to be issued or the 16 benefits or advantages promised thereby or the dividends or share of 17 the surplus to be received thereon, or making any false or misleading 18 statement as to the dividends or share of surplus previously paid on 19 similar policies, or making any misleading representation or any 20 misrepresentation as to the financial condition of any insurer, or as to 21 the legal reserve system upon which any life insurer operates, or using 22 any name or title of any policy or class of policies misrepresenting the 23 true nature thereof, or making any misrepresentation to any 24 policyholder insured in any company for the purpose of inducing or 25 tending to induce such policyholder to lapse, forfeit, or surrender his 26 insurance. 27 (2) False information and advertising generally. Making, 28 publishing, disseminating, circulating, or placing before the public, or 29 causing, directly or indirectly, to be made, published, disseminated, 30 circulated, or placed before the public, in a newspaper, magazine or 31 other publication, or in the form of a notice, circular, pamphlet, letter 32 or poster, or over any radio station, or in any other way, an 33 advertisement, announcement or statement containing any assertion, 34 representation or statement with respect to the business of insurance 35 or with respect to any person in the conduct of his insurance business, 36 which is untrue, deceptive or misleading. 37 (3) Defamation. Making, publishing, disseminating, or circulating, 38 directly or indirectly, or aiding, abetting or encouraging the making, 39 publishing, disseminating or circulating of any oral or written 40 statement or any pamphlet, circular, article or literature which is false, 41 or maliciously critical of or derogatory to the financial condition of an 42 insurer, and which is calculated to injure any person engaged in the 43 business of insurance. EXPLANATION - Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and intended to be omitted in the law. Matter underlined thus is new matter. S78 ZANE 3 1 (4) Boycott, coercion and intimidation. Entering into any 2 agreement to commit, or by any concerted action committing, any act 3 of boycott, coercion or intimidation resulting in or tending to result in 4 unreasonable restraint of, or monopoly in, the business of insurance, 5 or resulting in or tending to result in unreasonable influence being 6 exerted upon any producer that has an in-force contract as of the 7 effective date of P.L.1997, c.151 (C.17:33B-64 et al.) for the purpose 8 of replacing the in-force contract with a UEZ agent contract pursuant 9 to section 22 of P.L.1997, c.151 (C.17:33C-4). 10 (5) False financial statements. Filing with any supervisory or other 11 public official, or making, publishing, disseminating, circulating or 12 delivering to any person, or placing before the public, or causing 13 directly or indirectly, to be made, published, disseminated, circulated, 14 delivered to any person, or placed before the public, any false 15 statement of financial condition of an insurer with intent to deceive. 16 Making any false entry in any book, report or statement of any 17 insurer with intent to deceive any agent or examiner lawfully appointed 18 to examine into its condition or into any of its affairs, or any public 19 official to whom such insurer is required by law to report, or who was 20 authorized by law to examine into its condition or into any of its 21 affairs, or, with like intent, willfully omitting to make a true entry of 22 any material fact pertaining to the business of such insurer in any 23 book, report or statement of such insurer. 24 (6) Stock operations and advisory board contracts. Issuing or 25 delivering or permitting agents, officers, or employees to issue or 26 deliver, agency company stock or other capital stock, or benefit 27 certificates or shares in any common-law corporation, or securities or 28 any special or advisory board contracts or other contracts of any kind 29 promising returns and profits as an inducement to insurance. 30 (7) Unfair discrimination. (a) Making or permitting any unfair 31 discrimination between individuals of the same class and equal 32 expectation of life in the rates charged for any contract of life 33 insurance or of life annuity or in the dividends or other benefits 34 payable thereon, or in any other of the terms and conditions of such 35 contract. 36 (b) Making or permitting any unfair discrimination between 37 individuals of the same class and of essentially the same hazard in the 38 amount of premium, policy fees, or rates charged for any policy or 39 contract of accident or health insurance or in the benefits payable 40 thereunder, or in any of the terms or conditions of such contract, or in 41 any other manner whatsoever. 42 (c) Making or permitting any discrimination against any person or 43 group of persons because of race, creed, color, national origin or 44 ancestry of such person or group of persons in the issuance, 45 withholding, extension or renewal of any policy of insurance, or in the 46 fixing of the rates, terms or conditions therefor, or in the issuance or S78 ZANE 4 1 acceptance of any application therefor. 2 (d) Making or permitting discrimination in the use of any form of 3 policy of insurance which expresses, directly or indirectly, any 4 limitation or discrimination as to race, creed, color, national origin or 5 ancestry or any intent to make any such limitation or discrimination. 6 (e) Making or permitting any unfair discrimination solely because 7 of age in the issuance, withholding, extension or renewal of any policy 8 or contract of automobile liability insurance or in the fixing of the 9 rates, terms or conditions therefor, or in the issuance or acceptance of 10 any application therefor, provided, that nothing herein shall be 11 construed to interfere with the application of any applicable rate 12 classification filed with and approved by the commissioner pursuant to 13 P.L.1944, c. 27 (C.17:29A-1 to 17:29A-28), or any amendment or 14 supplement thereof, which is in effect with respect to such policy or 15 contract of insurance. 16 (8) Rebates. (a) Except as otherwise expressly provided by law, 17 knowingly permitting or offering to make or making any contract of 18 life insurance, life annuity or accident and health insurance, or 19 agreement as to such contract other than as plainly expressed in the 20 contract issued thereon, or paying or allowing, or giving or offering to 21 pay, allow, or give, directly or indirectly, as inducement to such 22 insurance, or annuity, any rebate of premiums payable on the contract, 23 or any special favor or advantage in the dividends or other benefits 24 thereon, or any valuable consideration or inducement whatsoever not 25 specified in the contract; or giving, or selling, or purchasing or 26 offering to give, sell, or purchase as inducement to such insurance or 27 annuity or in connection therewith, any stocks, bonds, or other 28 securities of any insurance company or other corporation, association, 29 or partnership, or any dividends or profits accrued thereon, or 30 anything of value whatsoever not specified in the contract. 31 (b) Nothing in clause 7 or paragraph (a) of this clause 8 shall be 32 construed as including within the definition of discrimination or 33 rebates any of the following practices: (i) in the case of any contract 34 of life insurance or life annuity, paying bonuses to policyholders or 35 otherwise abating their premiums in whole or in part out of surplus 36 accumulated from nonparticipating insurance; provided, that any such 37 bonuses or abatement of premiums shall be fair and equitable to 38 policyholders and for the best interests of the company and its 39 policyholders; (ii) in the case of life insurance policies issued on the 40 industrial debit plan, making allowance to policyholders who have 41 continuously for a specified period made premium payments directly 42 to an office of the insurer in an amount which fairly represents the 43 saving in collection expense; (iii) readjustment of the rate of premium 44 for a group policy based on the loss or expense experience thereunder, 45 at the end of the first or any subsequent policy year of insurance 46 thereunder, which may be made retroactive only for such policy year. S78 ZANE 5 1 (9) Unfair claim settlement practices. Committing or performing 2 with such frequency as to indicate a general business practice any of 3 the following: 4 (a) Misrepresenting pertinent facts or insurance policy provisions 5 relating to coverages at issue; 6 (b) Failing to acknowledge and act reasonably promptly upon 7 communications with respect to claims arising under insurance 8 policies; 9 (c) Failing to adopt and implement reasonable standards for the 10 prompt investigation of claims arising under insurance policies; 11 (d) Refusing to pay claims without conducting a reasonable 12 investigation based upon all available information; 13 (e) Failing to affirm or deny coverage of claims within a reasonable 14 time after proof of loss statements have been completed; 15 (f) Not attempting in good faith to effectuate prompt, fair and 16 equitable settlements of claims in which liability has become 17 reasonably clear; 18 (g) Compelling insureds to institute litigation to recover amounts 19 due under an insurance policy by offering substantially less than the 20 amounts ultimately recovered in actions brought by such insureds; 21 (h) Attempting to settle a claim for less than the amount to which 22 a reasonable man would have believed he was entitled by reference to 23 written or printed advertising material accompanying or made part of 24 an application; 25 (i) Attempting to settle claims on the basis of an application which 26 was altered without notice to, or knowledge or consent of the insured; 27 (j) Making claims payments to insureds or beneficiaries not 28 accompanied by a statement setting forth the coverage under which the 29 payments are being made; 30 (k) Making known to insureds or claimants a policy of appealing 31 from arbitration awards in favor of insureds or claimants for the 32 purpose of compelling them to accept settlements or compromises less 33 than the amount awarded in arbitration; 34 (l) Delaying the investigation or payment of claims by requiring an 35 insured, claimant or the physician of either to submit a preliminary 36 claim report and then requiring the subsequent submission of formal 37 proof of loss forms, both of which submissions contain substantially 38 the same information; 39 (m) Failing to promptly settle claims, where liability has become 40 reasonably clear, under one portion of the insurance policy coverage 41 in order to influence settlements under other portions of the insurance 42 policy coverage; 43 (n) Failing to promptly provide a reasonable explanation of the 44 basis in the insurance policy in relation to the facts or applicable law 45 for denial of a claim or for the offer of a compromise settlement; 46 (o) Requiring insureds or claimants to institute or prosecute S78 ZANE 6 1 complaints regarding motor vehicle violations in the municipal court 2 as a condition of paying private passenger automobile insurance 3 claims. 4 (10) Failure to maintain complaint handling procedures. Failure of 5 any person to maintain a complete record of all the complaints which 6 it has received since the date of its last examination. This record shall 7 indicate the total number of complaints, their classification by line of 8 insurance, the nature of each complaint, the disposition of these 9 complaints, and the time it took to process each complaint. For 10 purposes of this subsection, "complaint" shall mean any written 11 communication primarily expressing a grievance. 12 (11) The enumeration of this act of specific unfair methods of 13 competition and unfair or deceptive acts and practices in the business 14 of insurance is not exclusive or restrictive or intended to limit the 15 powers of the commissioner or any court of review under the 16 provisions of section 9 of this act. 17 (cf: P.L.1997, c.151, s.29) 18 19 2. This act shall take effect on the 90th day after the date of 20 enactment. ASSEMBLY, No. 3224 STATE OF NEW JERSEY 209th LEGISLATURE INTRODUCED FEBRUARY 15, 2001 Sponsored by: Assemblyman GEORGE F. GEIST District 4 (Camden and Gloucester) Assemblyman CHRISTOPHER "KIP" BATEMAN District 16 (Morris and Somerset) SYNOPSIS Prohibits insurers from requiring filing of municipal court complaint as precondition to payment of certain claims. CURRENT VERSION OF TEXT As introduced. A3224 GEIST, BATEMAN 2 1 AN ACT concerning unfair insurance claim settlement practices and 2 amending P.L.1947, c.379. 3 4 BE IT ENACTED by the Senate and General Assembly of the State 5 of New Jersey: 6 7 1. Section 4 of P.L.1947, c.379 (C.17:29B-4) is amended to read 8 as follows: 9 4. The following are hereby defined as unfair methods of 10 competition and unfair and deceptive acts or practices in the business 11 of insurance: 12 (1) Misrepresentations and false advertising of policy contracts. 13 Making, issuing, circulating, or causing to be made, issued or 14 circulated, any estimate, illustration, circular or statement 15 misrepresenting the terms of any policy issued or to be issued or the 16 benefits or advantages promised thereby or the dividends or share of 17 the surplus to be received thereon, or making any false or misleading 18 statement as to the dividends or share of surplus previously paid on 19 similar policies, or making any misleading representation or any 20 misrepresentation as to the financial condition of any insurer, or as to 21 the legal reserve system upon which any life insurer operates, or using 22 any name or title of any policy or class of policies misrepresenting the 23 true nature thereof, or making any misrepresentation to any 24 policyholder insured in any company for the purpose of inducing or 25 tending to induce such policyholder to lapse, forfeit, or surrender his 26 insurance. 27 (2) False information and advertising generally. Making, 28 publishing, disseminating, circulating, or placing before the public, or 29 causing, directly or indirectly, to be made, published, disseminated, 30 circulated, or placed before the public, in a newspaper, magazine or 31 other publication, or in the form of a notice, circular, pamphlet, letter 32 or poster, or over any radio station, or in any other way, an 33 advertisement, announcement or statement containing any assertion, 34 representation or statement with respect to the business of insurance 35 or with respect to any person in the conduct of his insurance business, 36 which is untrue, deceptive or misleading. 37 (3) Defamation. Making, publishing, disseminating, or circulating, 38 directly or indirectly, or aiding, abetting or encouraging the making, 39 publishing, disseminating or circulating of any oral or written 40 statement or any pamphlet, circular, article or literature which is false, 41 or maliciously critical of or derogatory to the financial condition of an 42 insurer, and which is calculated to injure any person engaged in the 43 business of insurance. EXPLANATION - Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and intended to be omitted in the law. Matter underlined thus is new matter. A3224 GEIST, BATEMAN 3 1 (4) Boycott, coercion and intimidation. Entering into any 2 agreement to commit, or by any concerted action committing, any act 3 of boycott, coercion or intimidation resulting in or tending to result in 4 unreasonable restraint of, or monopoly in, the business of insurance, 5 or resulting in or tending to result in unreasonable influence being 6 exerted upon any producer that has an in-force contract as of the 7 effective date of P.L.1997, c.151 (C.17:33B-64 et al.) for the purpose 8 of replacing the in-force contract with a UEZ agent contract pursuant 9 to section 22 of P.L.1997, c.151 (C.17:33C-4). 10 (5) False financial statements. Filing with any supervisory or other 11 public official, or making, publishing, disseminating, circulating or 12 delivering to any person, or placing before the public, or causing 13 directly or indirectly, to be made, published, disseminated, circulated, 14 delivered to any person, or placed before the public, any false 15 statement of financial condition of an insurer with intent to deceive. 16 Making any false entry in any book, report or statement of any 17 insurer with intent to deceive any agent or examiner lawfully appointed 18 to examine into its condition or into any of its affairs, or any public 19 official to whom such insurer is required by law to report, or who was 20 authorized by law to examine into its condition or into any of its 21 affairs, or, with like intent, willfully omitting to make a true entry of 22 any material fact pertaining to the business of such insurer in any 23 book, report or statement of such insurer. 24 (6) Stock operations and advisory board contracts. Issuing or 25 delivering or permitting agents, officers, or employees to issue or 26 deliver, agency company stock or other capital stock, or benefit 27 certificates or shares in any common-law corporation, or securities or 28 any special or advisory board contracts or other contracts of any kind 29 promising returns and profits as an inducement to insurance. 30 (7) Unfair discrimination. (a) Making or permitting any unfair 31 discrimination between individuals of the same class and equal 32 expectation of life in the rates charged for any contract of life 33 insurance or of life annuity or in the dividends or other benefits 34 payable thereon, or in any other of the terms and conditions of such 35 contract. 36 (b) Making or permitting any unfair discrimination between 37 individuals of the same class and of essentially the same hazard in the 38 amount of premium, policy fees, or rates charged for any policy or 39 contract of accident or health insurance or in the benefits payable 40 thereunder, or in any of the terms or conditions of such contract, or in 41 any other manner whatsoever. 42 (c) Making or permitting any discrimination against any person or 43 group of persons because of race, creed, color, national origin or 44 ancestry of such person or group of persons in the issuance, 45 withholding, extension or renewal of any policy of insurance, or in the 46 fixing of the rates, terms or conditions therefor, or in the issuance or A3224 GEIST, BATEMAN 4 1 acceptance of any application therefor. 2 (d) Making or permitting discrimination in the use of any form of 3 policy of insurance which expresses, directly or indirectly, any 4 limitation or discrimination as to race, creed, color, national origin or 5 ancestry or any intent to make any such limitation or discrimination. 6 (e) Making or permitting any unfair discrimination solely because 7 of age in the issuance, withholding, extension or renewal of any policy 8 or contract of automobile liability insurance or in the fixing of the 9 rates, terms or conditions therefor, or in the issuance or acceptance of 10 any application therefor, provided, that nothing herein shall be 11 construed to interfere with the application of any applicable rate 12 classification filed with and approved by the commissioner pursuant to 13 P.L.1944, c.27 (C.17:29A-1 to 17:29A-28), or any amendment or 14 supplement thereof, which is in effect with respect to such policy or 15 contract of insurance. 16 (8) Rebates. (a) Except as otherwise expressly provided by law, 17 knowingly permitting or offering to make or making any contract of 18 life insurance, life annuity or accident and health insurance, or 19 agreement as to such contract other than as plainly expressed in the 20 contract issued thereon, or paying or allowing, or giving or offering to 21 pay, allow, or give, directly or indirectly, as inducement to such 22 insurance, or annuity, any rebate of premiums payable on the contract, 23 or any special favor or advantage in the dividends or other benefits 24 thereon, or any valuable consideration or inducement whatsoever not 25 specified in the contract; or giving, or selling, or purchasing or 26 offering to give, sell, or purchase as inducement to such insurance or 27 annuity or in connection therewith, any stocks, bonds, or other 28 securities of any insurance company or other corporation, association, 29 or partnership, or any dividends or profits accrued thereon, or 30 anything of value whatsoever not specified in the contract. 31 (b) Nothing in clause 7 or paragraph (a) of this clause 8 shall be 32 construed as including within the definition of discrimination or 33 rebates any of the following practices: (i) in the case of any contract 34 of life insurance or life annuity, paying bonuses to policyholders or 35 otherwise abating their premiums in whole or in part out of surplus 36 accumulated from nonparticipating insurance; provided, that any such 37 bonuses or abatement of premiums shall be fair and equitable to 38 policyholders and for the best interests of the company and its 39 policyholders; (ii) in the case of life insurance policies issued on the 40 industrial debit plan, making allowance to policyholders who have 41 continuously for a specified period made premium payments directly 42 to an office of the insurer in an amount which fairly represents the 43 saving in collection expense; (iii) readjustment of the rate of premium 44 for a group policy based on the loss or expense experience thereunder, 45 at the end of the first or any subsequent policy year of insurance 46 thereunder, which may be made retroactive only for such policy year. A3224 GEIST, BATEMAN 5 1 (9) Unfair claim settlement practices. Committing or performing 2 with such frequency as to indicate a general business practice any of 3 the following: 4 (a) Misrepresenting pertinent facts or insurance policy provisions 5 relating to coverages at issue; 6 (b) Failing to acknowledge and act reasonably promptly upon 7 communications with respect to claims arising under insurance 8 policies; 9 (c) Failing to adopt and implement reasonable standards for the 10 prompt investigation of claims arising under insurance policies; 11 (d) Refusing to pay claims without conducting a reasonable 12 investigation based upon all available information; 13 (e) Failing to affirm or deny coverage of claims within a reasonable 14 time after proof of loss statements have been completed; 15 (f) Not attempting in good faith to effectuate prompt, fair and 16 equitable settlements of claims in which liability has become 17 reasonably clear; 18 (g) Compelling insureds to institute litigation to recover amounts 19 due under an insurance policy by offering substantially less than the 20 amounts ultimately recovered in actions brought by such insureds; 21 (h) Attempting to settle a claim for less than the amount to which 22 a reasonable man would have believed he was entitled by reference to 23 written or printed advertising material accompanying or made part of 24 an application; 25 (i) Attempting to settle claims on the basis of an application which 26 was altered without notice to, or knowledge or consent of the insured; 27 (j) Making claims payments to insureds or beneficiaries not 28 accompanied by a statement setting forth the coverage under which the 29 payments are being made; 30 (k) Making known to insureds or claimants a policy of appealing 31 from arbitration awards in favor of insureds or claimants for the 32 purpose of compelling them to accept settlements or compromises less 33 than the amount awarded in arbitration; 34 (l) Delaying the investigation or payment of claims by requiring an 35 insured, claimant or the physician of either to submit a preliminary 36 claim report and then requiring the subsequent submission of formal 37 proof of loss forms, both of which submissions contain substantially 38 the same information; 39 (m) Failing to promptly settle claims, where liability has become 40 reasonably clear, under one portion of the insurance policy coverage 41 in order to influence settlements under other portions of the insurance 42 policy coverage; 43 (n) Failing to promptly provide a reasonable explanation of the 44 basis in the insurance policy in relation to the facts or applicable law 45 for denial of a claim or for the offer of a compromise settlement; 46 (o) Requiring insureds or claimants to institute or prosecute A3224 GEIST, BATEMAN 6 1 complaints regarding motor vehicle violations in the municipal court 2 as a condition of paying private passenger automobile insurance 3 claims. 4 (10) Failure to maintain complaint handling procedures. Failure of 5 any person to maintain a complete record of all the complaints which 6 it has received since the date of its last examination. This record shall 7 indicate the total number of complaints, their classification by line of 8 insurance, the nature of each complaint, the disposition of these 9 complaints, and the time it took to process each complaint. For 10 purposes of this subsection, "complaint" shall mean any written 11 communication primarily expressing a grievance. 12 (11) The enumeration of this act of specific unfair methods of 13 competition and unfair or deceptive acts and practices in the business 14 of insurance is not exclusive or restrictive or intended to limit the 15 powers of the commissioner or any court of review under the 16 provisions of section 9 of this act. 17 (cf: P.L.1997, c.151, s.29) 18 19 2. This act shall take effect on the 90th day after the date of 20 enactment. 21 22 23 STATEMENT 24 25 This bill makes it an unfair claim practice for an insurance company 26 to require insureds or claimants to file or prosecute complaints 27 regarding motor vehicle violations in municipal court as a condition of 28 payment of private passenger automobile insurance claims. ASSEMBLY BANKING AND INSURANCE COMMITTEE STATEMENT TO ASSEMBLY, No. 3224 STATE OF NEW JERSEY DATED: MAY 3, 2001 The Assembly Banking and Insurance Committee reports favorably Assembly Bill No. 3224. This bill makes it an unfair claim practice for an insurance company to require insureds or claimants to file or prosecute complaints regarding motor vehicle violations in municipal court as a condition of payment of private passenger automobile insurance claims. This bill is identical to Senate Bill No. 78 which was also reported by the committee. §2 - Note P.L. 2001, CHAPTER 168, approved July 26, 2001 Senate, No. 78 1 AN ACT concerning unfair insurance claim settlement practices and 2 amending P.L.1947, c.379. 3 4 BE IT ENACTED by the Senate and General Assembly of the State 5 of New Jersey: 6 7 1. Section 4 of P.L.1947, c.379 (C.17:29B-4) is amended to read 8 as follows: 9 4. The following are hereby defined as unfair methods of 10 competition and unfair and deceptive acts or practices in the business 11 of insurance: 12 (1) Misrepresentations and false advertising of policy contracts. 13 Making, issuing, circulating, or causing to be made, issued or 14 circulated, any estimate, illustration, circular or statement 15 misrepresenting the terms of any policy issued or to be issued or the 16 benefits or advantages promised thereby or the dividends or share of 17 the surplus to be received thereon, or making any false or misleading 18 statement as to the dividends or share of surplus previously paid on 19 similar policies, or making any misleading representation or any 20 misrepresentation as to the financial condition of any insurer, or as to 21 the legal reserve system upon which any life insurer operates, or using 22 any name or title of any policy or class of policies misrepresenting the 23 true nature thereof, or making any misrepresentation to any 24 policyholder insured in any company for the purpose of inducing or 25 tending to induce such policyholder to lapse, forfeit, or surrender his 26 insurance. 27 (2) False information and advertising generally. Making, 28 publishing, disseminating, circulating, or placing before the public, or 29 causing, directly or indirectly, to be made, published, disseminated, 30 circulated, or placed before the public, in a newspaper, magazine or 31 other publication, or in the form of a notice, circular, pamphlet, letter 32 or poster, or over any radio station, or in any other way, an 33 advertisement, announcement or statement containing any assertion, 34 representation or statement with respect to the business of insurance 35 or with respect to any person in the conduct of his insurance business, 36 which is untrue, deceptive or misleading. 37 (3) Defamation. Making, publishing, disseminating, or circulating, 38 directly or indirectly, or aiding, abetting or encouraging the making, 39 publishing, disseminating or circulating of any oral or written 40 statement or any pamphlet, circular, article or literature which is false, 41 or maliciously critical of or derogatory to the financial condition of an EXPLANATION - Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and intended to be omitted in the law. Matter underlined thus is new matter. S78 2 1 insurer, and which is calculated to injure any person engaged in the 2 business of insurance. 3 (4) Boycott, coercion and intimidation. Entering into any 4 agreement to commit, or by any concerted action committing, any act 5 of boycott, coercion or intimidation resulting in or tending to result in 6 unreasonable restraint of, or monopoly in, the business of insurance, 7 or resulting in or tending to result in unreasonable influence being 8 exerted upon any producer that has an in-force contract as of the 9 effective date of P.L.1997, c.151 (C.17:33B-64 et al.) for the purpose 10 of replacing the in-force contract with a UEZ agent contract pursuant 11 to section 22 of P.L.1997, c.151 (C.17:33C-4). 12 (5) False financial statements. Filing with any supervisory or other 13 public official, or making, publishing, disseminating, circulating or 14 delivering to any person, or placing before the public, or causing 15 directly or indirectly, to be made, published, disseminated, circulated, 16 delivered to any person, or placed before the public, any false 17 statement of financial condition of an insurer with intent to deceive. 18 Making any false entry in any book, report or statement of any 19 insurer with intent to deceive any agent or examiner lawfully appointed 20 to examine into its condition or into any of its affairs, or any public 21 official to whom such insurer is required by law to report, or who was 22 authorized by law to examine into its condition or into any of its 23 affairs, or, with like intent, willfully omitting to make a true entry of 24 any material fact pertaining to the business of such insurer in any 25 book, report or statement of such insurer. 26 (6) Stock operations and advisory board contracts. Issuing or 27 delivering or permitting agents, officers, or employees to issue or 28 deliver, agency company stock or other capital stock, or benefit 29 certificates or shares in any common-law corporation, or securities or 30 any special or advisory board contracts or other contracts of any kind 31 promising returns and profits as an inducement to insurance. 32 (7) Unfair discrimination. (a) Making or permitting any unfair 33 discrimination between individuals of the same class and equal 34 expectation of life in the rates charged for any contract of life 35 insurance or of life annuity or in the dividends or other benefits 36 payable thereon, or in any other of the terms and conditions of such 37 contract. 38 (b) Making or permitting any unfair discrimination between 39 individuals of the same class and of essentially the same hazard in the 40 amount of premium, policy fees, or rates charged for any policy or 41 contract of accident or health insurance or in the benefits payable 42 thereunder, or in any of the terms or conditions of such contract, or in 43 any other manner whatsoever. 44 (c) Making or permitting any discrimination against any person or 45 group of persons because of race, creed, color, national origin or 46 ancestry of such person or group of persons in the issuance, S78 3 1 withholding, extension or renewal of any policy of insurance, or in the 2 fixing of the rates, terms or conditions therefor, or in the issuance or 3 acceptance of any application therefor. 4 (d) Making or permitting discrimination in the use of any form of 5 policy of insurance which expresses, directly or indirectly, any 6 limitation or discrimination as to race, creed, color, national origin or 7 ancestry or any intent to make any such limitation or discrimination. 8 (e) Making or permitting any unfair discrimination solely because 9 of age in the issuance, withholding, extension or renewal of any policy 10 or contract of automobile liability insurance or in the fixing of the 11 rates, terms or conditions therefor, or in the issuance or acceptance of 12 any application therefor, provided, that nothing herein shall be 13 construed to interfere with the application of any applicable rate 14 classification filed with and approved by the commissioner pursuant to 15 P.L.1944, c. 27 (C.17:29A-1 to 17:29A-28), or any amendment or 16 supplement thereof, which is in effect with respect to such policy or 17 contract of insurance. 18 (8) Rebates. (a) Except as otherwise expressly provided by law, 19 knowingly permitting or offering to make or making any contract of 20 life insurance, life annuity or accident and health insurance, or 21 agreement as to such contract other than as plainly expressed in the 22 contract issued thereon, or paying or allowing, or giving or offering to 23 pay, allow, or give, directly or indirectly, as inducement to such 24 insurance, or annuity, any rebate of premiums payable on the contract, 25 or any special favor or advantage in the dividends or other benefits 26 thereon, or any valuable consideration or inducement whatsoever not 27 specified in the contract; or giving, or selling, or purchasing or 28 offering to give, sell, or purchase as inducement to such insurance or 29 annuity or in connection therewith, any stocks, bonds, or other 30 securities of any insurance company or other corporation, association, 31 or partnership, or any dividends or profits accrued thereon, or 32 anything of value whatsoever not specified in the contract. 33 (b) Nothing in clause 7 or paragraph (a) of this clause 8 shall be 34 construed as including within the definition of discrimination or 35 rebates any of the following practices: (i) in the case of any contract 36 of life insurance or life annuity, paying bonuses to policyholders or 37 otherwise abating their premiums in whole or in part out of surplus 38 accumulated from nonparticipating insurance; provided, that any such 39 bonuses or abatement of premiums shall be fair and equitable to 40 policyholders and for the best interests of the company and its 41 policyholders; (ii) in the case of life insurance policies issued on the 42 industrial debit plan, making allowance to policyholders who have 43 continuously for a specified period made premium payments directly 44 to an office of the insurer in an amount which fairly represents the 45 saving in collection expense; (iii) readjustment of the rate of premium 46 for a group policy based on the loss or expense experience thereunder, S78 4 1 at the end of the first or any subsequent policy year of insurance 2 thereunder, which may be made retroactive only for such policy year. 3 (9) Unfair claim settlement practices. Committing or performing 4 with such frequency as to indicate a general business practice any of 5 the following: 6 (a) Misrepresenting pertinent facts or insurance policy provisions 7 relating to coverages at issue; 8 (b) Failing to acknowledge and act reasonably promptly upon 9 communications with respect to claims arising under insurance 10 policies; 11 (c) Failing to adopt and implement reasonable standards for the 12 prompt investigation of claims arising under insurance policies; 13 (d) Refusing to pay claims without conducting a reasonable 14 investigation based upon all available information; 15 (e) Failing to affirm or deny coverage of claims within a reasonable 16 time after proof of loss statements have been completed; 17 (f) Not attempting in good faith to effectuate prompt, fair and 18 equitable settlements of claims in which liability has become 19 reasonably clear; 20 (g) Compelling insureds to institute litigation to recover amounts 21 due under an insurance policy by offering substantially less than the 22 amounts ultimately recovered in actions brought by such insureds; 23 (h) Attempting to settle a claim for less than the amount to which 24 a reasonable man would have believed he was entitled by reference to 25 written or printed advertising material accompanying or made part of 26 an application; 27 (i) Attempting to settle claims on the basis of an application which 28 was altered without notice to, or knowledge or consent of the insured; 29 (j) Making claims payments to insureds or beneficiaries not 30 accompanied by a statement setting forth the coverage under which the 31 payments are being made; 32 (k) Making known to insureds or claimants a policy of appealing 33 from arbitration awards in favor of insureds or claimants for the 34 purpose of compelling them to accept settlements or compromises less 35 than the amount awarded in arbitration; 36 (l) Delaying the investigation or payment of claims by requiring an 37 insured, claimant or the physician of either to submit a preliminary 38 claim report and then requiring the subsequent submission of formal 39 proof of loss forms, both of which submissions contain substantially 40 the same information; 41 (m) Failing to promptly settle claims, where liability has become 42 reasonably clear, under one portion of the insurance policy coverage 43 in order to influence settlements under other portions of the insurance 44 policy coverage; 45 (n) Failing to promptly provide a reasonable explanation of the 46 basis in the insurance policy in relation to the facts or applicable law S78 5 1 for denial of a claim or for the offer of a compromise settlement; 2 (o) Requiring insureds or claimants to institute or prosecute 3 complaints regarding motor vehicle violations in the municipal court 4 as a condition of paying private passenger automobile insurance 5 claims. 6 (10) Failure to maintain complaint handling procedures. Failure of 7 any person to maintain a complete record of all the complaints which 8 it has received since the date of its last examination. This record shall 9 indicate the total number of complaints, their classification by line of 10 insurance, the nature of each complaint, the disposition of these 11 complaints, and the time it took to process each complaint. For 12 purposes of this subsection, "complaint" shall mean any written 13 communication primarily expressing a grievance. 14 (11) The enumeration of this act of specific unfair methods of 15 competition and unfair or deceptive acts and practices in the business 16 of insurance is not exclusive or restrictive or intended to limit the 17 powers of the commissioner or any court of review under the 18 provisions of section 9 of this act. 19 (cf: P.L.1997, c.151, s.29) 20 21 2. This act shall take effect on the 90th day after the date of 22 enactment. 23 24 25 26 27 Prohibits insurers from requiring filing of municipal court complaint as 28 precondition to payment of certain claims. CHAPTER 168 AN ACT concerning unfair insurance claim settlement practices and amending P.L.1947, c.379. BE IT ENACTED by the Senate and General Assembly of the State of New Jersey: 1. Section 4 of P.L.1947, c.379 (C.17:29B-4) is amended to read as follows: C.17:29B-4 Unfair methods of competition, unfair deceptive acts, practices, defined. 4. The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance: (1) Misrepresentations and false advertising of policy contracts. Making, issuing, circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or making any misleading representation or any misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or using any name or title of any policy or class of policies misrepresenting the true nature thereof, or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce such policyholder to lapse, forfeit, or surrender his insurance. (2) False information and advertising generally. Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading. (3) Defamation. Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting or encouraging the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory to the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance. (4) Boycott, coercion and intimidation. Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance, or resulting in or tending to result in unreasonable influence being exerted upon any producer that has an in-force contract as of the effective date of P.L.1997, c.151 (C.17:33B-64 et al.) for the purpose of replacing the in-force contract with a UEZ agent contract pursuant to section 22 of P.L.1997, c.151 (C.17:33C-4). (5) False financial statements. Filing with any supervisory or other public official, or making, publishing, disseminating, circulating or delivering to any person, or placing before the public, or causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive. Making any false entry in any book, report or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who was authorized by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report or statement of such insurer. (6) Stock operations and advisory board contracts. Issuing or delivering or permitting agents, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common-law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance. (7) Unfair discrimination. (a) Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract P.L. 2001, CHAPTER 168 2 of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract. (b) Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatsoever. (c) Making or permitting any discrimination against any person or group of persons because of race, creed, color, national origin or ancestry of such person or group of persons in the issuance, withholding, extension or renewal of any policy of insurance, or in the fixing of the rates, terms or conditions therefor, or in the issuance or acceptance of any application therefor. (d) Making or permitting discrimination in the use of any form of policy of insurance which expresses, directly or indirectly, any limitation or discrimination as to race, creed, color, national origin or ancestry or any intent to make any such limitation or discrimination. (e) Making or permitting any unfair discrimination solely because of age in the issuance, withholding, extension or renewal of any policy or contract of automobile liability insurance or in the fixing of the rates, terms or conditions therefor, or in the issuance or acceptance of any application therefor, provided, that nothing herein shall be construed to interfere with the application of any applicable rate classification filed with and approved by the commissioner pursuant to P.L.1944, c. 27 (C.17:29A-1 to 17:29A-28), or any amendment or supplement thereof, which is in effect with respect to such policy or contract of insurance. (8) Rebates. (a) Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any contract of life insurance, life annuity or accident and health insurance, or agreement as to such contract other than as plainly expressed in the contract issued thereon, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatsoever not specified in the contract; or giving, or selling, or purchasing or offering to give, sell, or purchase as inducement to such insurance or annuity or in connection therewith, any stocks, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract. (b) Nothing in clause 7 or paragraph (a) of this clause 8 shall be construed as including within the definition of discrimination or rebates any of the following practices: (i) in the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance; provided, that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders; (ii) in the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expense; (iii) readjustment of the rate of premium for a group policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year. (9) Unfair claim settlement practices. Committing or performing with such frequency as to indicate a general business practice any of the following: (a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; (b) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies; (c) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies; (d) Refusing to pay claims without conducting a reasonable investigation based upon all available information; (e) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed; P.L. 2001, CHAPTER 168 3 (f) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear; (g) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds; (h) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application; (i) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured; (j) Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made; (k) Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration; (l) Delaying the investigation or payment of claims by requiring an insured, claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information; (m) Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; (n) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; (o) Requiring insureds or claimants to institute or prosecute complaints regarding motor vehicle violations in the municipal court as a condition of paying private passenger automobile insurance claims. (10) Failure to maintain complaint handling procedures. Failure of any person to maintain a complete record of all the complaints which it has received since the date of its last examination. This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of these complaints, and the time it took to process each complaint. For purposes of this subsection, "complaint" shall mean any written communication primarily expressing a grievance. (11) The enumeration of this act of specific unfair methods of competition and unfair or deceptive acts and practices in the business of insurance is not exclusive or restrictive or intended to limit the powers of the commissioner or any court of review under the provisions of section 9 of this act. 2. This act shall take effect on the 90th day after the date of enactment. Approved July 26, 2001. Office of the Governor PO BOX 004 TRENTON, NJ 08625 CONTACT: Rae Hutton NEWS RELEASE or Kristin Zebrowski 609-777-2600 RELEASE: July 27 , 2001 Acting Governor Donald T. DiFrancesco signed the following legislation: A-2478, sponsored by Senate Majority Leader, John Bennett (R-Monmouth) and Assemblymen Jack Gibson (R-Cape May/Atlantic/Cumberland) and John Kelly (R-Bergen/Essex/Passaic), provides that any relevant municipal ordinance would not apply to property for which any person is conducting actions related to historic pesticide contamination under the oversight of the Department of Environmental Protection, provided that such person, as a condition of any development approval by the municipality, obtains a full-site no further action letter from the department. A-1755, sponsored by Assembly members David Wolfe (R-Monmouth/Ocean) and Joel Weingarten (R-Essex/Union), expands imdemnification for school board members and employees and establishes a code of ethics for school board members. S-78, sponsored by Senator Raymond Zane (R-Salem/Cumberland/Gloucester) and Assemblymen George Geist (R-Camden/Gloucester) and Kip Bateman (R-Morris/ Somerset), prohibits insurers from requiring filing of municipal court complaint as precondition to payment of certain claims. A-1332, sponsored by Senators Peter Inverso (R-Mercer/Middlesex) and Robert Singer (R- Burlington/Monmouth/Ocean) and the late Assemblyman Alan Augustine (R- Middlesex/Morris/Somerset/Union), allows stalking victims protected by temporary restraining orders to register to vote without disclosing their street address. AJR-49, sponsored by Senator Raymond Lesniak (D-Union) and Assemblymen Kip Bateman (R-Morris/Somerset) and Richard Bagger (R-Middlesex/Morris/Somerset/ Union), designates the third Thursday of October of each year as "New Jersey Credit Union Day." S-1978, sponsored by Senators Gerald Cardinale (R-Bergen) and Anthony Bucco (R-Morris) and Assemblymen Kip Bateman (R-Morris/Somerset) and Peter Biondi (R- Morris/Somerset), provides that records of dispositive or final judgments in bankruptcies, records regarding collateral and the perfection of security interests and records of transfers by a financial institution of collateral that is real property shall be retained for six years as opposed to the current 20-year period.