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6 posts from February 2013

Thursday, February 28, 2013

'Bad faith' bill is bad policy for New Jersey

S-2460, the covertly dubbed “Consumer Protection Act of 2012,” is a new lease on trial lawyers’ attempt to create a new cause of action for ‘bad faith’ (S-766/A-3434).

That bill, S-2460, is now scheduled for a hearing on Monday, March 4th, in the Senate Commerce Committee. 

Proponents argue that this bill will help policyholders who have been affected by Superstorm Sandy by codifying existing case law, protecting their right to sue insurance companies who fail to pay claims to which they are entitled.  In reality, it adds uncertainty and greater consumer costs to New Jersey's homeowners' insurance market:
  • Very few victims of Sandy will be helped.  Those who lacked flood coverage, had inadequate coverage limits, or could not afford their deductible could not file suit under this bill.
  • Policyholders would be able to recover damages in excess of the terms of their insurance contract.  In addition, they would be able to file for attorneys' fees, court costs, and prejudgment interest dating to the time the suit was filed.   
  • All New Jersey insurance customers, including businesses which purchase commercial insurance, will pay higher insurance premiums as a result.

And as we noted last month, many of us opt for lower premiums in exchange for higher deductibles.  Others quickly sign on the dotted line and hope we never meet the devil lurking in the details.  But when the worst happens, as many New Jerseyans experienced late last year, customers expect their insurer to cover their losses as defined in their coverage. 

New Jersey Manufacturers Insurance Co. (NJM) CEO Bernie Flynn told a legislative committee last month that they expect payouts to reach $300 million.  State Farm has made a point of expediting their 30,000 Sandy-related claims.  On some occasions, however, an insurer may fail to live up to their end of the agreement and deny payment to a customer.  New Jersey consumers are able to file suit against their insurer in these instances.  But recently reintroduced legislation threatens to add more bureaucracy and litigation into an already stressed civil justice system. 

S-2460, the covertly dubbed “Consumer Protection Act of 2012,” is a new lease on trial lawyers’ attempt to create a new cause of action for ‘bad faith’ (S-766/A-3434).  It wouldn’t simply codify existing case law with respect to ‘bad faith;’ rather, a court would only need to find that an insurer acted ‘unreasonably’ in order to win a bad faith case, adding subjectivity and the potential for awards beyond one’s coverage. 

Acting Department of Banking and Insurance commissioner Kenneth Kobylowski noted that New Jersey’s strong homeowners’ insurance market had rates near the national average despite having property values among the highest in the country. 

"To have average premiums in the middle of the marketplace is just a testament to how stable, how competitive and how well-run our homeowners' market is," he told NJ BIZ

But if the cost of doing business increases for New Jersey’s insurance industry, we can all expect our premiums to rise. 

Thursday, February 21, 2013

Bill granting civil immunity to ambulatory, rescue, and first aid squads advances

S-2165 received the unanimous approval of the Senate Law and Public Safety Committee.  Under current law, only the officers and members of first aid, ambulance or rescue squads have civil immunity; not the entities themselves.  This bill clarifies that the entities, as well as the officers and members are not liable for any civil damages as the result of an act or the omission of an act committed while in training for or in the rendering of intermediate life support services in good faith. Its companion bill, A-3282, passed the Assembly Health and Senior Services committee with bipartisan support in January. 

S-2165 is sponsored by Senator Kip Bateman (R-Somerset).  Its assembly sponsors include Assemblymen Eric Peterson (R-Hunterdon), Anthony Bucco (R-Morris), and Herb Conaway (D-Burlington).  The measure awaits full legislative approval in each house. 

Wednesday, February 13, 2013

Subway is the latest example of why NJ's Consumer Fraud Act needs fixing

We can tell you that New Jersey’s courtrooms are among the nation’s easiest in which to file a ridiculous lawsuit, but sometimes the weaknesses of the NJCFA speak for themselves. 

Two New Jersey residents contend that the size of their ‘footlong’ sub from Subway fell short of twelve inches.  And with a straight face, they were able to file a lawsuit under the New Jersey Consumer Fraud Act with ease.  Their lawyer is seeking class-action status on behalf of everyone who’s purchased one and meets the criteria. 

A recent NJ BIZ article (Advocates hope bill takes bite out of N.J. fraud law / Jared Kaltwasser, 2/4/13)) examines a possible remedy for the New Jersey Consumer Fraud Act, sponsored by Assemblyman Craig Coughlin.  A-3264 has been referred to the Assembly Consumer Affairs Committee. 

Monday, February 11, 2013

Register now for NJLRA's Spring Membership Luncheon, honoring two of New Jersey's Outstanding Legislators

March 12 event
There is no cost to attend.  Advanced registration is required.

When: Tuesday, March 12th, 12:00 p.m.

Where: Trenton Country Club

  REGISTER HERE

Thursday, February 07, 2013

A-1831 unanimously clears Assembly Health Panel

In our ongoing quest to keep good doctors practicing in New Jersey, NJLRA supported A-1831 before the Assembly Health and Senior Services Committee, which advanced it with bipartisan support.

If enacted, A-1831 would help lower liability insurance premiums, which is frequently cited as a key reason for New Jersey’s so-called medical brain drain.  Insurance premiums begin to increase the moment a lawsuit is filed.  This bill would prevent insurance carriers from raising liability premiums based on a claim of medical practice, unless the physician is found liable in court.  It would also prohibit insurers from increasing liability premiums in certain charitable or emergency situations. 

A-1831 is an important first step to help reverse the public crisis of doctors fleeing our state, which is expected to worsen significantly in the next few years.  

Practicing specialized medicine in New Jersey is comparatively difficult for recent medical school graduates.  In addition to their student loans, new doctors must bear New Jersey’s high cost of liability insurance premiums.  Specialties which carry some of the highest premiums, including obstetrics and gynecology, disproportionately impact New Jersey women.  It is no longer cost effective for many existing OBGYNs in New Jersey to deliver babies, and many have stopped doing so altogether. 

We thank the committee and Chairman Conaway for their advancement of this measure. 

Tuesday, February 05, 2013

Assembly Health Committee to hear medical liability reform measure

The Assembly Health and Senior Services Committee is scheduled to hear A-1831 on Thursday, marking an important step toward addressing deep concerns about the cost of liability insurance within the medical community.   

Sponsored by Chairman Herb Conaway (D-Burlington), A-1831 would prevent insurance carriers from raising liability premiums based on a claim of medical practice, unless the physician is found liable in court, and would prohibit insurers from increasing liability premiums in certain charitable or emergency situations. 

This legislation would also provide civil immunity to healthcare professionals who volunteer their services in good faith.  Civil immunity would be available to volunteer healthcare professionals who do not have an active provider-patient at the time of the emergency.  As our population outpaces the number of physicians we need to adequately care for the health of New Jersey residents, volunteer healthcare professionals will become increasingly important.  By offering civil immunity to these volunteer medical personnel, A-1831 takes a step toward addressing our New Jersey’s public health needs. 

Practicing specialized medicine in New Jersey is comparatively difficult for recent medical school graduates.  In addition to their student loans, new doctors must bear New Jersey’s high cost of liability insurance premiums.  Specialties which carry some of the highest premiums, including obstetrics and gynecology, disproportionately impact New Jersey women.  It is no longer cost effective for many existing OBGYNs in New Jersey to deliver babies, and many have stopped doing so altogether.  It’s not just a matter of addressing a significant healthcare cost-driver; it’s also about ensuring that New Jersey residents – especially women – have access to medical care.   

The hearing will take place at 10 a.m. in committee room 16.