Bill Text: NJ S950 | 2014-2015 | Regular Session | Introduced
Bill Title: Requires insurance producers to perform bona fide services for public entities in order to share commissions; requires disclosure of commission sharing.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-01-27 - Introduced in the Senate, Referred to Senate Commerce Committee [S950 Detail]
Download: New_Jersey-2014-S950-Introduced.html
Sponsored by:
Senator JENNIFER BECK
District 11 (Monmouth)
SYNOPSIS
Requires insurance producers to perform bona fide services for public entities in order to share commissions; requires disclosure of commission sharing.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning insurance producer commissions and supplementing P.L.2001, c.210 (C.17:22A-26 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. An insurance producer shall not share a commission or fee in connection with insurance coverages placed or other insurance services rendered for a public entity unless the following conditions are met:
(1) the insurance producer with whom the commission or fee is shared actually rendered a bona fide insurance service for the public entity and the commission or fee is proportionate to the service rendered;
(2) the insurance producer that shares the commission or fee discloses in writing to the Commissioner of Banking and Insurance and to the most senior official of the public entity involved:
(a) the name of the insurance producer with whom the commission or fee is shared;
(b) a description of the bona fide insurance services rendered for the public entity by the insurance producer with whom the commission or fee is shared; and
(c) the amount of commission or fee received by the insurance producer with whom the commission or fee is shared; and
(3) the sharing of the commission or fee is approved by the public entity.
b. The commissioner shall further specify, by regulation, the information that shall be provided by an insurance producer in the disclosure required pursuant to paragraph (2) of subsection a. of this section, and the procedure for providing the disclosure.
c. For purposes of this section:
"Bona fide insurance service" means:
(1) placing a policy of insurance or a renewal of a policy;
(2) identifying risks or exposures and developing customized insurance programs;
(3) formulating an insurance contract or endorsement;
(4) developing or maintaining loss control or risk management activities;
(5) performing claims administration or management;
(6) conducting an audit; or
(7) any other service specified by the commissioner by regulation.
"Local government agency" means any agency, board, governing body, including the chief executive officer, bureau, division, office, commission or other instrumentality within a county or municipality of this State, and any independent local authority, including any entity created by more than one county or municipality of this State, which performs functions other than of a purely advisory nature.
"Local school district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes and any jointure commission, county vocational school, county special services district, educational services commission, educational research and demonstration center, environmental education center, and educational information and resource center.
"Public entity" means a local government agency, local school district, or a State agency.
"State agency" means any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, the Legislature of the State and any office, board, bureau or commission within or created by the Legislature, and, to the extent consistent with law, any interstate agency to which New Jersey is a party and any independent State authority, commission, instrumentality or agency, including institutions of higher education.
d. In addition to being subject to the penalties provided for in section 20 of P.L.2001, c.210 (C.17:22A-45), an insurance producer that shares a commission or fee in violation of any provision of this section, shall also forfeit the commission or fee.
2. This act shall take effect immediately.
STATEMENT
This bill supplements the "New Jersey Insurance Producer Licensing Act of 2001," P.L.2001, c.210 (C.17:22A-26 et seq.), to prohibit an insurance producer from sharing a commission or fee in connection with insurance coverages placed or other insurance services rendered for a public entity, as defined in the bill, unless the following conditions are met:
(1) the insurance producer with whom the commission or fee is shared actually rendered a bona fide insurance service for the public entity and the commission or fee is proportionate to the service rendered;
(2) the insurance producer that shares the commission or fee discloses in writing to the Commissioner of Banking and Insurance and to the most senior official of the public entity involved:
· the name of the insurance producer with whom the commission or fee is shared;
· a description of the bona fide insurance services rendered for the public entity by the insurance producer with whom the commission or fee is shared; and
· the amount of commission or fee received by the insurance producer with whom the commission or fee is shared; and
(3) the sharing of the commission or fee is approved by the public entity.
The bill also provides that the Commissioner of Banking and Insurance shall further specify, by regulation, the information that shall be provided by an insurance producer in the disclosure required and the procedure for providing the disclosure.
The bill defines "bona fide insurance service" as any one of certain activities as specified in the bill. The bill defines public entities to include all State, local government, and school district entities and instrumentalities.
The bill also provides that, in addition to being subject to the penalties already provided for in the "New Jersey Insurance Producer Licensing Act of 2001," an insurance producer that shares a commission or fee in violation of any provision of this section, shall also forfeit the commission or fee.
