Bill Text: NJ S2460 | 2012-2013 | Regular Session | Introduced
Bill Title: "Consumer Protection Act of 2012."
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2013-01-08 - Introduced in the Senate, Referred to Senate Commerce Committee [S2460 Detail]
Download: New_Jersey-2012-S2460-Introduced.html
Sponsored by:
Senator NICHOLAS P. SCUTARI
District 22 (Middlesex, Somerset and Union)
Senator JENNIFER BECK
District 11 (Monmouth)
SYNOPSIS
"Consumer Protection Act of 2012."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning bad faith in the settlement of insurance claims and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Consumer Protection Act of 2012."
2. As used in this act:
"Claimant" means an individual, corporation, association, partnership or other legal entity asserting a direct or assigned right to payment by an insurer under an insurance policy, arising out of a contingency or loss covered by the policy.
"Insurance policy" means any property or casualty insurance policy or contract issued, executed, renewed or delivered in this State including a policy issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.).
"Insurer" means any individual, corporation, association, partnership or other legal entity which issues, executes, renews or delivers an insurance policy in this State, or which is responsible for determining claims made under the policy.
3. In addition to the enforcement authority provided to the Commissioner of Banking and Insurance pursuant to the provisions of P.L.1947, c.379 (C.17:29B-1 et seq.) or any other law, a claimant may, regardless of any action by the commissioner, file a civil action in a court of competent jurisdiction against its insurer for any violation of the provisions of subsection (9) of section 4 of P.L.1947, c.379 (C.17:29B-4), regarding unfair claim settlement practices, notwithstanding that the insurer did not violate any applicable provision with enough frequency as to indicate a general business practice.
4. Upon establishing that a violation of the provisions of subsection (9) of section 4 of P.L.1947, c.379 (C.17:29B-4) has occurred, pursuant to section 3 of this act, the claimant shall be entitled to:
a. the full amount of damages as set forth in the final judgment, regardless of the coverage limits of the policy;
b. prejudgment interest, reasonable attorney's fees, and all reasonable litigation expenses from the date of the institution of the action filed pursuant to this act. The prejudgment interest shall be calculated at the rate provided for tort actions, or for non-acceptance of a formal offer for judgment, whichever is higher, as prescribed in the Rules of Court; and
c. punitive damages, when the insurer's acts or omissions demonstrate, by clear and convincing evidence, actual malice or wanton and willful disregard of any person who foreseeably might be harmed by the insurer's acts or omissions.
5. This act shall take effect immediately and shall apply to all claims filed by a claimant on or after October 1, 2012.
STATEMENT
This bill, the "Consumer Protection Act of 2012," establishes a private cause of action for insureds or their assignees regarding unfair practices in the settlement or attempted settlement of insurance claims arising out of property and casualty insurance policies.
The bill provides that a claimant may, regardless of any action by the Commissioner of Banking and Insurance, file a civil action in a court of competent jurisdiction against its insurer for any violation of the provisions of subsection (9) of section 4 of P.L.1947, c.379 (C.17:29B-4) regarding unfair claim settlement practices, notwithstanding that the insurer did not violate any applicable provision with enough frequency as to indicate a general business practice.
Under the bill, if the claimant can establish such a violation, the claimant is entitled to:
(1) the full amount of damages as set forth in the final judgment, regardless of the coverage limits of the policy;
(2) prejudgment interest, reasonable attorney's fees, and all reasonable litigation expenses from the date of the institution of the action filed pursuant to the provisions of this bill. The prejudgment interest shall be calculated at the rate provided for tort actions, or for non-acceptance of a formal offer for judgment, whichever is higher, as prescribed in the Rules of Court; and
(3) punitive damages, when the insurer's acts or omissions demonstrate, by clear and convincing evidence, actual malice or wanton and willful disregard of any person who foreseeably might be harmed by the insurer's acts or omissions.
The provisions of the bill intend to incorporate into statutory law certain aspects of New Jersey's current case law, which recognize private causes of action in first-party and third-party claims regarding the bad faith actions of insurance companies which result in harm to their insureds. See Pickett v. Lloyd's, 131 N.J. 457 (1993), Samuel v. Doe, 158 N.J. 134 (1999), Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474 (1974). This bill is not in any way intended to narrow or limit the rights of insureds under established case law to assert a private cause of action for the bad faith actions of insurance companies.
The bill takes effect immediately upon enactment and applies to all claims filed on or after October 1, 2012.
