Bill Text: NJ A3978 | 2016-2017 | Regular Session | Introduced
Bill Title: Provides certain automobile insurance coverage for certain persons in event of fraudulent actions by policyholders.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2016-06-20 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A3978 Detail]
Download: New_Jersey-2016-A3978-Introduced.html
Sponsored by:
Assemblyman JOSEPH A. LAGANA
District 38 (Bergen and Passaic)
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
SYNOPSIS
Provides certain automobile insurance coverage for certain persons in event of fraudulent actions by policyholders.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning private passenger automobile insurance coverage for certain persons in the event of fraudulent actions by policyholders and amending P.L.1983, c.320.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 7 of P.L.1983, c.320 (C.17:33A-7) is amended to read as follows:
7. a. Any insurance company damaged as the result of a violation of any provision of [this act] P.L.1983, c.320 (C.17:33A-1 et seq.) may sue therefor in any court of competent jurisdiction to recover compensatory damages, which shall include reasonable investigation expenses, costs of suit and attorneys fees.
b. (1) A successful claimant under subsection a. shall recover treble damages if the court determines that the defendant has engaged in a pattern of violating [this act] P.L.1983, c.320 (C.17:33A-1 et seq.).
(2) If a legal proceeding under P.L.1983, c.320 (C.17:33A-1 et seq.) results in a determination that any entry of a bill, invoice, or other demand or request for payment was in violation of P.L.1983, c.320 (C.17:33A-1 et seq.), a successful claimant under this section shall not be required to pay any portion of that bill, invoice, or other demand or request for payment.
c. A claimant under this section shall mail a copy of the initial claim, amended claim, counterclaims, briefs and legal memoranda to the commissioner at the time of filing of such documents with the court wherein the matter is pending. A successful claimant shall report to the commissioner, on a form prescribed by the commissioner, the amount recovered and such other information as is required by the commissioner.
d. Upon receipt of notification of the filing of a claim by an insurer, the commissioner may join in the action for the purpose of seeking judgment for the payment of a civil penalty authorized under section 5 of [this act] P.L.1983, c.320 (C.17:33A-1 et seq.). If the commissioner prevails, the court may also award court costs and reasonable attorney fees actually incurred by the commissioner.
e. No action shall be brought by an insurance company under this section more than six years after the cause of action has accrued.
f. (1) A private passenger automobile insurance company that is successful in litigation in proving that a violation of section 4 of P.L.1983, c.320 (C.17:33A-4) has occurred due to fraudulent conduct by the policyholder, notwithstanding any voiding of the policyholder's policy due to the violation of that section, shall continue to have the following coverage obligations to persons who are completely innocent of the fraudulent conduct and who are injured in an accident due to the fault of the policyholder but who are not covered under another policy of private passenger automobile insurance:
(a) Personal injury protection coverage up to $15,000 per person, which shall not be subject to any increased amounts of coverage that may otherwise be available pursuant to subsection a. of section 4 of P.L.1998, c.21 (C.39:6A-3.1) or subsection e. of section 13 of P.L.1983, c.362 (C.39:6A-4.3); and
(b) No bodily injury coverage, notwithstanding the mandatory minimum insurance mandated by section 4 of P.L.1998, c.21 (C.39:6A-3.1), and no duty to defend or indemnify as to bodily injury damages, notwithstanding any other law to the contrary.
(2) A person injured in an accident under the circumstances described in paragraph (1) of this subsection, in addition to any coverage available pursuant to subparagraph (a) of paragraph (1) of this subsection, shall have primary recourse for damages from the uninsured and underinsured portion of any private passenger automobile coverage available to them, and if there is no such coverage, then from the Unsatisfied Claim and Judgment Fund.
(3) Nothing in this subsection shall be construed to interfere with or eliminate any cause of action the innocent person may have against the policyholder who engaged in fraudulent conduct.
(cf: P.L.1997, c.151, s.5)
2. This act shall take effect on the 90th day next following enactment.
STATEMENT
This bill amends the "New Jersey Insurance Fraud Prevention Act," P.L.1983, c.320 (C.17:33A-1 et seq.), (hereinafter, the "act") to provide certain automobile insurance coverage for innocent persons in the event of fraudulent actions by policyholders.
The bill provides that if a legal proceeding under the act results in a determination that any entry of a bill, invoice, or other demand or request for payment was in violation of the act, an insurance company that is a successful claimant under the act shall not be required to pay any portion of that bill, invoice, or other demand or request for payment.
The bill also provides that a private passenger automobile insurance company that is successful in litigation in proving that a violation of section 4 of P.L.1983, c.320 (C.17:33A-4) has occurred due to fraudulent conduct by the policyholder, notwithstanding any voiding of the policyholder's policy due to the violation of that section, shall continue to have the following coverage obligations to persons who are completely innocent of the fraudulent conduct and who are injured in an accident due to the fault of the policyholder but who are not covered under another policy of private passenger automobile insurance:
(1) Personal injury protection coverage up to $15,000 per person, which shall not be subject to any increased amounts of coverage that may otherwise be available pursuant to subsection a. of section 4 of P.L.1998, c.21 (C.39:6A-3.1) or subsection e. of section 13 of P.L.1983, c.362 (C.39:6A-4.3); and
(2) No bodily injury coverage, notwithstanding the mandatory minimum insurance mandated by section 4 of P.L.1998, c.21 (C.39:6A-3.1), and no duty to defend or indemnify as to bodily injury damages, notwithstanding any other law to the contrary.
The bill also provides that a person injured in an accident under the circumstances described above shall have primary recourse for damages from the uninsured and underinsured portion of any private passenger automobile coverage available to them, and if there is no such coverage, then from the Unsatisfied Claim and Judgment Fund.
Finally, the bill clarifies that nothing in the bill shall be construed to interfere with or eliminate any cause of action the innocent person may have against the policyholder who engaged in fraudulent conduct.
