NJ PC State Law
Service Fee Requirements
-fee must bear a reasonable relationship to the service and not be discriminatory -A fee may not be returned as an inducement to purchase a policy -No service fee for any one policy may exceed $20 -A fee may not be charged for completing forms required by an insurer for servicing a policy, such as accident forms -A maximum service fee of $15 may be charged for a producer acting as a broker or consultant upon placement of a renewal. An inspection fee may be charged if no inspections were made in the preceding 3 years. -Only one service fee may be charged per year -No producer may charge a service fee for services rendered in the sale or service of life or health insurance
Renewal info
-licenses expire biennially on the last day of the producer's birth month -New producer licenses must have a term of at least 18 months. -Business entity producer licenses expire biennially on May 31. -24 hours of CE, of which 3 for ethics -for flood insurance, 3 hours
When does a licensee need to notify the commission of a change of address
30 days
when does a request to open or close a branch office need to be submitted by
30 days
Who are disabilities paid to
Disability benefits are paid to the employee's dependents if the employee dies. If there are no dependents, up to $3,500 in any unpaid benefits may be paid for funeral and burial expenses.
Liability Coverage - Basic Auto Insurance Policy
Minimum liability coverage is $5,000 per accident. Insurers must offer optional coverage of up to $10,000.
Modification of Exportable List
Once the Commissioner reviews the hearing record, he/she will rule as eligible for export any class or classes of insurance coverage or risk for which he finds no reasonable or adequate market among authorized insurers. However, if the Commissioner finds a reasonable or adequate market does exist among authorized insurers, he/she may strike any class or classes of insurance coverage or risks from the exportable list. If, during the term of a duly published exportable list, the Commissioner determines which conditions require a modification of the exportable list, he /she may amend the list after a hearing. Notice of the Commissioner's action will be provided to all surplus lines agents, eligible surplus lines insurers, authorized insurers and others who have previously requested receipt of such information.
General Provisions of Auto Insurance ID card
One identification card will be issued for each vehicle insured under the policy. Each identification card will be effective for no more than 14 months from the effective date indicated on its face. A replacement card will be issued each year upon renewal of the policy. A replacement card must also be issued upon a change of vehicle, the acquisition of additional vehicles, or upon assignment of a new policy number.
Paul vs. Virginia (1869)
Resulted in a landmark decision establishing the right of each state to regulate the business of insurance. The Court ruled the insurance industry was not subject to the commerce clause of the Constitution. This decision stood until reversed in 1944.
Retrocession
Retrocession is the transfer of risk from one reinsurer to another reinsurer.
Court actions
are interpretations and rulings by courts of law to settle dispute. Interpretations are required when a case involves a statute whose meaning is vague or ambiguous. The judge will use canons of statutory interpretation, or common sense derived from common law, and legislative history to resolve the meaning of statutes.
within how many days does an insurer notify the department when a contract was executed with an agent appointment and when it was canceled
within 15 days of both
What is the Penalty for a deceptive act or practice
$1,000 per violation. If the person knew or reasonably should have known he/she was in violation the penalty may be increased to $5,000 for each violation. In addition the Commissioner may impose a fine of up to $5,000 for the first violation, and up to $10,000 for any subsequent violation of any provision of New Jersey insurance law.
How much will The New Jersey Life and Health Insurance Guaranty Association assume the contractual obligations of an insolvent insurer in death benefits for any one individual.
$500,000 in life insurance death benefits for any one person or $100,000 in net cash surrender. The maximum benefit will not exceed an aggregate of $500,000 to any one individual.
Auto Inspections
-An insurer must inspect an auto under a new policy before it may provide physical damage coverage to that auto. This rule also applies for replacement and additional autos. -The insurer may also require auto inspection as a condition for policy renewal -The insurer may request inspection of a damaged auto before or after repair - Inspection requirements do not apply to new autos -The choice of repair shop lies with the owner of the auto -Before repairs may begin, a repair facility must disclose to the insured, in writing, that he/she might invalidate warranties or lease agreements by choosing the repair facility with which the insurer has the most generous arrangement. The insured must sign the notice before repairs may begin. -An insurer must report any evidence of a repair shop's misconduct to the Director of the Division of Motor Vehicles (DMV)
Prelicensing Requirements
-Be at least 18 years of age -Have not committed any act that is a ground for denial, suspension or revocation -Complete a prelicensing course of study for the lines of authority for which the individual has applied -Pay the fees as required -Pass, within 1 year of the application date, the examinations for the lines of authority for which the individual has applied
Exemptions - Prelicensing courses may be waived for an applicant who :
-Holds a license in another state -Is a veteran of the United States armed services and has completed a course of veteran's education -Has completed courses at an accredited college that are equivalent to the courses required -Is an attorney admitted to practice in New Jersey (title insurance authority only) -Holds a professional designation
Lapse
-If an applicant's license has lapsed for a period of less than 1 year, the applicant may apply for late renewal and pay a late renewal fee to be granted a waiver from the prelicensing education and examination requirement. -A licensee who is unable to comply with the renewal procedures due to military service or some other extenuating circumstance, such as long-term medical disability, may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.
The following practices are specifically prohibited unless approved by the Commissioner:
-Mid-term premium increase or a reduction in coverage -Block nonrenewing or cancelling entire lines or classes of insurance
Other CE info
-Producers who fulfill the CE requirements for an approved professional insurance designation will be awarded 12 credit hours for each full year of the license period. -A course provider must file course completion information within 15 days. -An instructor may count a course's credit hours to his/her own CE requirements. However, he/she may count them only once, even when teaching a course multiple times. -Producers may request that credit hours from courses taken in accredited college or university or those taken for attainment of a professional designation be awarded as continuing education hours.
Prelicencing requirements for an applicant previously licensed for the same lines in another state
-The person currently is licensed in good standing in that state -The application is received within 90 days of the cancellation of the applicant's previous license -Not required any pre education or examination if the above is met
Whenever someone has engaged in any unfair method of competition or any unfair or deceptive act or practice, the Commissioner may issue a notice of a hearing, providing how many days notice?
10
within how many days does a producer need to notify the applicant or insurance when an application or policy is modified or when the policy needs to be delivered after the producer has the policy
10 days
Penalties for rating organizations knowingly violating the Commercial Insurance Deregulation Act
10 days notice before suspension and may be fined $25-$500 per violation
when must a notice of Automobile Cancellation be delivered?
15 days prior to the effective date for non payment. A notice of cancellation for any other reason must be delivered at least 20 days prior to the effective date.
How many course hours are required for licensing
20 course hours except Bail Bonds is 10 hours plus 6 hours on regulation of the insurance industry
when must All premiums being returned to the insured must be paid to the insured?
5 business days after being received by the producer. If the returned premium is to be credited to the insured's account, the credit must be shown and applied to the next billing statement sent to the insured.
Once a business name has been approved by the department of treasury, how long do you have to submit your license
90 days
Certificate of Diligent Effort for Surplus Lines
A New Jersey producer must try to place a risk with 3 authorized insurers whom the producer believes, in good faith, might insure the risk. A producer may place the risk with a surplus lines agent only if declined by all 3. As evidence of having made a diligent effort, a producer must complete the Certification of Effort to Place Risk with Authorized Insurer, and submit it to the surplus lines agent within 30 business days of the effective date of any surplus lines insurance. The certificate must be made available for inspection by the Commissioner for at least 5 years.
Available coverages for PAIP
A PAIP policy must cover bodily injury, property damage, personal injury protection, uninsured/underinsured motorists and physical damage coverages at the minimum levels required by law. Higher limits of liability may be provided, up to the following maximums: -250/500/100 or a combined single limit of $500,000 for bodily injury and property damage liability coverage -250/500/100 for uninsured/underinsured motorists liability coverages The maximum coverage for physical damage in any loss is ACV minus any deductible, up to $60,000. Additional insurance may be obtained through surplus lines of insurance.
Coverage - Special Automobile Insurance Policy
A Special Automobile Insurance policy provides emergency personal injury protection up to $250,000 per person, per accident, covering medically necessary treatment, the absence of which could reasonably be expected to result in death, serious impairment, or serious dysfunction. Coverage includes: -Immediate pre-hospitalization care -Transportation to a hospital or trauma center -Emergency room care, surgery, critical and acute care The plan also includes a death benefit of $10,000. The SAIP does not provide liability, collision, comprehensive, uninsured or underinsured motorist coverage. Forms must be approved by the Commissioner before use and must comply with a statewide rating system, which is adjusted annually, in order to be approved. Risks must be equitably assigned to insurers.
Urban Enterprise Zone (UEZ) Program
A UEZ is an urban geographic area identified as being underserved by the auto insurance market. The UEZ Program is designed to increase the availability of automobile insurance in these areas by providing incentives to qualified insurers to write automobile insurance. An auto insurer must apply to the Commissioner in order to participate in the UEZ program. Each auto insurer must submit a quarterly report of its in-force personal auto exposures in UEZs by zip code to the PAIP within 10 days after the end of each quarter. Violations may result in legal penalties including: -A fine of up to $1,000 for the first violation -$2,000 for each following violation, not to exceed $25,000 -Suspension or revocation of an insurer's Certificate of Authority
Certificate of Authority
A certificate issued by the Commissioner evidencing the authority of an insurer to transact insurance in this State.
Uninsured and Underinsured Motorist Damage Limits
A combined single limit of $500,000, or at least 250/500/100: -$250,000 per person for bodily injury -$500,000 per accident for bodily injury -$100,000 per accident for property damage, including a $500 deductible
when must a notice of an Issuance of Automobile Nonrenewal Notice be delivered
A notice of nonrenewal may be delivered 60-90 days prior to the expiration of the current policy.
Reinstatement
A producer license may be reinstated after surrender during the same license period by completing an application as required for initial license applications. No additional license fee for that period will be required but a processing fee will be paid.
Disclosure - Basic Auto Insurance Policy
A prospective insured electing a basic auto policy or a special auto policy must sign the Basic Automobile Insurance Policy Coverage Selection disclosure form, approved by the Commissioner, stating: -Basic auto coverage provides less than $250,000 in medical expense benefits coverage -Special auto coverage is for emergency care only, although a death benefit is also provided -The named insured might be sued for non-economic loss if he/she gets either a special auto policy or a basic auto policy without the optional $10,000 liability coverage for bodily injury
Self Insurance Works Comp
A self-insurer must have a self-insured retention limit of at least $100,000.
Governing Committee of CAIP
A servicing carrier cannot serve as a member of the governing committee. The CAIP's governing committee must investigate any complaints from a servicing carrier about the CAIP's administration. A servicing carrier has 20 days after receiving an adverse decision from the CAIP's governing committee in which to petition the Commissioner for an appeal. The Commissioner must decide within 30 days whether to allow the appeal.
Surplus Lines
A surplus lines agent is a person licensed with the authority to place insurance coverages on behalf of surplus lines insurers. A surplus lines insurer is a foreign or alien insurer eligible to transact surplus lines business in New Jersey.
Monetary Penalty for Time-related Violations
A time related violation is failing to respond to a department inquiry or failing to act or cease actions as established in the order within 15 calendar days. Each calendar day a producer is in violation of established statute will be considered a separate violation.
Advisory Organizations
An advisory organization helps insurers make their own rates by providing statistics or recommendations. In order to support a rate filing, an advisory organization must file with the Commissioner: -Its constitution and bylaws -A list of members -The name and address of a resident designee for receiving service of process -Any change to any such document or designation
Temporary Work Authority
An applicant may be issued a temporary work authority valid for up to 60 days. A temporary work order may be issued to a nonresident licensee, upon moving to New Jersey: -Within 30 days of changing residence to New Jersey, the licensee must notify the commissioner of the change and request the temporary work order -Within 90 days of changing residence to New Jersey, the licensee must request a resident license -The licensee must submit completed fingerprint forms including electronic fingerprinting -Upon receipt of this information, the licensee's status will be changed from nonresident to resident
Physical Exam for disability benefits to be paid
An employer may deny compensation if the employee refuses a physical exam.
Department Inquiry
An insurance producer must reply, in writing, to any inquiry of the department relative to the business of insurance within 15 calendar days after receiving the inquiry.
geographic redlining
An insurer may not reduce an agent's compensation because of the experience or geographic location of the risks he/she writes. Doing so on the basis of geographic location is called "geographic redlining."
Denial of Coverage - Auto Insurance
An insurer must tell an applicant, in the same medium the application is made, why it is denying auto coverage. If he/she is informed orally, the insurer must offer to provide a written explanation if the applicant requests one within 90 days. The applicant may appeal in writing to the Commissioner.
When can an insurer or employer cancel a policy
An insurer or employer may cancel a policy by giving at least 10 days' written notice by registered mail. A copy of the notice must be given to the Commissioner.
Statute of Limitations for a disability claim
An occupational disease claim must be filed within 2 years after the claimant first knows the disease is occupational. If compensation is elective, any claim for unpaid benefits must be filed within 2 years after the employer failed to pay compensation as required.
Business Entity
An organization may seek a New Jersey producer's license if it is domiciled or has obtained authorization to do business in the state of New Jersey. A business entity acting as an insurance producer must obtain an producer license, which will be granted once the business has paid the required fees and designated licensed insurance producer(s) responsible for compliance with New Jersey insurance laws, rules and regulations.
Violation of a Cease and Desist Order/Penalty
Any person who violates the Commissioner's cease and desist order is subject to a penalty of up to $5,000 per violation. In addition, the Commissioner may revoke or suspend the violator's license or certificate of authority.
Permanent Identification Cards
Auto insurers must issue an identification card to each insured as evidence of insurance. The card must contain: -The company name and address (the address may be that of the issuing agency -The insured's name and address -The policy number, effective date and expiration date -Description of the vehicle (year, make and model) including VIN -Notification of the commencement of medical treatment The reverse side of card must include the title: ADDRESS FOR NOTIFICATION OF COMMENCEMENT OF MEDICAL TREATMENT.
Limited Lines
Bail bonds, car rental insurance, credit insurance, ticket insurance, travel insurance, group mortgage cancellation, legal insurance, and self-storage personal property insurance.
PIP - Basic Auto Insurance Policy
Basic Auto Insurance must include PIP coverage with per-person limits of no more than: -$15,000 for reasonable and necessary treatment of bodily injury -Medical expense benefits up $250,000 may be paid in cases of: -Permanent or significant brain injury -Spinal cord injury or disfigurement -Other medically necessary treatment of significant injuries
Surplus Lines
Coverage written by unauthorized insurers.
Death Benefits
Death benefits are provided at 70% of wages for the deceased's dependents. A spouse who remarries may receive the lesser of the total compensation or 100 times the compensation paid before remarriage.
Bodily Injury and Property Damage limits
Bodily Injury and Property Damage - 15/30/5 The $5,000 for property damage, including damage caused by an uninsured auto. Property damage coverage is subject to a $500 deductible.
Liability For CAIP
CAIP policies provide a basic combined single limit of $35,000 unless a higher amount is mandated by law. Coverage over $5 million, the excess coverage is conditioned upon the CAIP being able to procure reinsurance.
Casualty
Coverage against legal liability, including death, injury or disability or damage to real or personal property.
workers comp surcharges
Each Workers' Compensation or Employers' Liability insurer and self-insured employer must pay a tax of .25% of net premiums to the State Tax Commissioner on or before June 1st of each year for the purpose of funding the Second Injury Fund.
Insurer and Self Insured Employer Reports
Each insurer and self-insured employer must submit reports of the total compensation paid and total earned premiums collected during the prior year by June 30th of each year.
Change of Address
Each licensee having a change of address (residential or business, including email) must provide written notification and return the current license within 30 days. Proof of notification must be maintained for 5 years or until receipt of a new license or other documentation from the department showing the new address.
Minimum Recordkeeping Requirements
Each producer must maintain accurate books and records reflecting all insurance-related transactions. Entries must be made at least once every 30 days. All required books and records of account, including bank records, must be maintained for a period of 5 years after the termination of coverage. The books and records may be maintained electronically if they can be reproduced in hard-copy, backups are produced daily, and,duplicate records are stored off-site.
Domestic Employee Coverage
Employers of domestic servants or household employees and their insurers are exempted from the provisions of Workers' Compensation laws. To provide compensation for injury to such employees, every homeowner's policy or other policy providing comprehensive personal liability insurance must include coverage against liability the policyholder may incur to an injured domestic servant or household employee or their dependents.
Limitation on Lawsuit Option - PIP
Every insured required to maintain PIP coverage is exempt from tort liability for non-economic loss resulting from covered bodily injury. Tort liability may be enforced if the bodily injury results in death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury. Under this tort option, the plaintiff must give the defendant a certificate from the treating physician within 60 days after the defendant's reply. The certificate must state the plaintiff's injury. The court may grant one 60-day extension for filing the certificate for good cause. A person intentionally and knowingly making a false or incorrect certificate is guilty of a 4th degree crime punishable by imprisonment and license forfeiture.
Rate Filing and Rate Making
Every insurer and rating organization must file its rates (including supplementary rate information, rate changes and amendments) with the Commissioner at least 30 days before use. Filings must be open to the public for inspection. When making rates, an insurer/organization must consider: -Past and prospective loss experience -Fire and catastrophe hazards -A reasonable profit for the insurer and, in the case of participating insurers, policyholders' dividends
PIP Coverage
Every standard auto liability policy must provide PIP benefits without regard to fault. -Medical expense benefits at least $15,000, up to $250,000 per person per accident -$25,000 of coverage must be provided for medically necessary treatment of nerve injury or disfigurement Note If no amount is elected, $250,000 of coverage must be provided. -Income continuation benefits no less than $100, payable weekly, subject to a lifetime limit of $5,200 -Essential service benefits of $12 per day with a lifetime limit of $4,380 -Death benefits of the maximum amount that would have been paid if no death had occurred -Funeral expense benefits of up to $1,000, payable to the deceased person's estate
Multiple Disabilities
For multiple disabilities, the benefit period must be determined separately for each disability.
Employer Penalties for Noncompliance for workers comp
If an employer fails to pay compensation for legitimate Workers' Compensation claims for 10 or more days, it may be fined up to $5,000 per 10 days of nonpayment. Failure or refusal to comply with a stop work order may result in a fine of between $1,000 and $5,000 for each day out of compliance. If an employer knowingly misrepresents 1 or more employees as independent contractors, the Director of the Division of Workers' Compensation may issue a stop-work order. The employer may request a hearing within 10 days of being served the stop-work order.
Payments for Minors
If compensation is payable to a person under 21 years of age, the person's guardian may dispute the claim and may compromise any disputed claim if the Division of Workers' Compensation approves the dispute or compromise. If the person under 21 is entitled to a total of $250 or less and is dependent upon a parent or guardian, the parent or guardian is entitled to receive the compensation. An employer must notify a minor's parent or guardian if it is not providing Workers' Compensation coverage. If an employer is liable to an illegally employed minor, the employer and its insurer must pay the total compensation to the minor. -If a minor under age 14 (a violation of child labor law) or between the ages of 14 and 18 without an employment certificate suffers a compensable injury or death, any benefits will be double the standard amounts.
Desist Orders for Prohibited Practices
If the finding is that the person did engage in the practice, a cease and desist order will be required and a penalty not to exceed $1,000 per violation (up to $5,000 if committed knowingly).
Penalties for violating information policies
In any case where a hearing results in the finding of a knowing violation of this act, the Commissioner may, in addition to the issuance of a cease and desist order, require payment of up to $500 per violation, not to exceed $10,000 for multiple violations. Any person who violates a cease and desist order may be subject to one or more of the following penalties: -A monetary fine of up to $10,000 per violation -A monetary fine of up to $50,000 if the violations constituted a general business practice -Suspension or revocation of any insurance institution's or agent's license
Twisting
Making any misleading representations or comparisons of policies, contracts or insurers for the purpose of inducing any person to terminate or convert a contract, or to take out a policy of life insurance or annuity contract with another insurer.
Notice to Employer for disability payments
No compensation is due until the employee gives notice to the employer. Notice to an employer of a compensable event is considered notice to the insurer. An employee must try to get employer authorization for medical and hospital expense benefits. An employer must be notified of a compensable occurrence within 14 days, and no compensation is allowed if the employer is not notified within 90 days. Compensation may be withheld until notice is given. An employer may not be held liable for any increase in compensation resulting from notice being received after 14 days.
Stock Acquisition & Common Management
No insurer may invest in of the capital stock of another insurer; nor can they have a common management with any other insurer in order to decrease competition.
Interlocking Directorate
No person may be a director of 2 or more competing insurers.
Limits on NJ FAIR Insurance
Personal Maximum coverage per location: $900,000 (building: $600,000; contents: $300,000). Commercial Maximum coverage per location: $1,500,000. Liability coverage is not provided. Basic Crime Indemnity Maximum limits: Residence burglary and robbery: $15,000 Storekeeper's burglary & robbery: $1,000 Office burglary and robbery: $1,000 Mercantile robbery:$1,000 inside$1,000 outside$5,000 outside when messenger accompanied by armed guard Mercantile safe burglary: $5,000 Mercantile open stock burglary: $10,000 or the coinsurance limit, whichever is greater
Physical Damage for CAIP
Policies may offer physical damage coverage only to private passenger type vehicles, light trucks (those weighing 10,000 pounds or less), motorcycles, recreational trailers, and social services vehicles. Physical damage coverage may be offered only in connection with a plan that includes bodily injury and property damage coverage. Policies may not provide physical damage coverage to vehicles that are at least 25 years old, fleets with 10 or more vehicles, vehicles that can seat more than 20 persons, emergency vehicles, and any vehicle with a registration not specifically associated with it. Comprehensive and collision coverage is on an ACV basis, less the deductible, subject to a limit. Amounts over the limit may be obtained by the named insured through a surplus lines insurer. A range of deductible options must be offered.
Personal Lines
Property and casualty coverage sold to individuals and families for primarily noncommercial purposes.
Rates for PAIP
Rates must be filed with the Commissioner for approval before use, and may not be inadequate, excessive, or unfairly discriminatory. The following coverages must be experience rated: -Any portion of liability coverage exceeding split limits of 50/100/25, or a combined single limit of $100,000 -Collision and comprehensive coverage: -For autos valued between $15,000 up to $25,000 the part of the rate applicable to the value between $15,000 and $25,000 must be experience rated -For autos valued at $25,000 and above, the entire rate must be experience rated
Eligibility Points - Auto Insurance
The Act required the Commissioner to develop a schedule of auto insurance eligibility points, which assigns a point value based on driving record (except for portions of a driving record that involve the use of emergency vehicles). The schedule prohibits consideration, when insuring a personal auto, of the first speeding ticket issued for more than 15 miles per hour over the speed limit.
Commercial Automobile Insurance Plan (CAIP)
The CAIP provides, and apportions among insurers, coverage for commercial autos and any eligible owner of a personal auto in good faith entitled to coverage but unable to obtain it in the voluntary insurance market. Every auto insurer must participate in CAIP as a condition of its authority to transact auto insurance in New Jersey. Any risk with 5 or more vehicles (not including trailers and semi-trailers) is deemed a fleet.
Compensation Rating and Inspection Bureau (CRIB)
The Compensation Rating and Inspection Bureau establishes and maintains rules, classifications, and rating plans for Workers' Compensation and Employers' Liability insurance, adjusting them to the hazard of individual risks by its own inspection. No insurer may write Workers' Compensation or Employers' Liability insurance in New Jersey, unless it is a member of CRIB. Each member of CRIB will have 1 representative entitled to 1 vote in the administration of CRIB's affairs.
Fair Automobile Insurance Reform Act of 1990
The Fair Act changed auto insurance legislation so insurers were able to make an adequate profit. The Commissioner appointed a trustee to manage the Association's liquidation.
McCarran-Ferguson Act (1945)
The McCarran-Ferguson Act of 1945, also known as Public Law 15, states the regulation and taxation of the insurance business by individual states is in the public's best interest. In addition, federal antitrust laws apply only to the extent that state law does not regulate insurance. With the McCarran-Ferguson Act as public law, state government—and not the Interstate Commerce Commission—regulates the insurance industry.
New Jersey Insurance Underwriting Association (FAIR Plan)
The New Jersey FAIR Plan was created to provide an adequate market for fire and extended coverage, including mine subsidence insurance.
New Jersey Insurance Underwriting Association (NJIUA)
The New Jersey Insurance Underwriting Association consists of all insurers authorized to write on a direct basis In New Jersey. It has the power to issue policies to applicants, assume reinsurance from its members, and cede reinsurance. Every Insurer must be a member.
Purpose of New Jersey Automobile Residual Market-Personal Automobile Insurance Plan (PAIP)
The PAIP provides personal auto coverage to qualified applicants and apportions those risks equitably among insurers in order to ensure competition in the personal auto market. Every admitted personal auto insurer must participate in the plan as a condition of its authority to transact business in New Jersey. To qualify for PAIP coverage, an applicant must be a qualified New Jersey resident who owns an auto that is registered and principally garaged in New Jersey. Military personnel stationed in New Jersey qualify even if the auto is registered in another state
U.S. vs. South-Eastern Underwriters Association (1944)
The South-Eastern Underwriters Association (SEUA) was found guilty of price fixing and other violations of the Sherman Anti-trust Act. The Supreme Court ruled insurance was interstate commerce and, when conducted across state lines, was subject to federal regulations.
PIP Deductibles
The applicant must be offered deductible options of $500, $1,000, $2,000, and $2,500 for any one accident. Medical expense benefits in any amount between the deductible selected and $5,000 will be subject to any copayment provided in the policy. If health coverage is not in force during a covered accident, the named insured must pay an additional deductible of $750 and the premium may increase.
Medical and Hospital Expense Benefits
The employer must pay any physician's charges of $50 or less. For any greater charges, the employer will have an opportunity to contest the charges before allowing or disallowing them.
workers comp coverage for emergency responders
The following persons must receive compensation if injured in the line of duty: -A volunteer emergency responder (i.e. firefighter, first aid or rescue squad worker, police officer, emergency manager) -A county fire marshal and his/her assistants -An officer or employee of any governing body -A health worker registered with the Emergency Health Care Provider Registry -A volunteer for the Division of Parks and Forestry, the Division of Fish and Wildlife, the New Jersey Natural Lands Trust, the New Jersey Historic Trust, and the Department of Agriculture -Any person doing work related to bioterrorism for the Department of Agriculture
Temporary Identification Cards
The format and content of the temporary card will be the same as those for a permanent identification card except: -The word "temporary" will precede the heading on the card -If the policy number is not yet available, the application or binder number is acceptable -An expiration date is not required; instead, the card will contain the following statement: "This card expires 60 days after the effective date shown above."
Available Coverages for CAIP
The maximum term of coverage under a CAIP policy may not exceed 5 years. To be eligible for CAIP coverage, a prospective insured must certify the inability to obtain insurance in the ordinary market within the previous 60 days.
Commercial Insurance Deregulation Act of 1982
The purpose of the Commercial Insurance Deregulation Act is to encourage price competition among commercial lines insurers, to prevent monopolies, and encourage efficient rating and marketing practices.
waiting period for disability payments
The waiting period to receive benefits, other than Medical Benefits, is 7 days.
Eligibility - Special Automobile Insurance Policy
This coverage may be offered only to eligible individuals who are enrolled in the federal Medicaid program.
essential services
Those services performed not for income but ordinarily performed by an individual for the care and maintenance of the individual's family or family household.
Correction, Amendment or Deletion of Recorded Personal Information
Within 30 business days after an individual requests recorded personal information be corrected, amended or deleted, a licensee must either fulfill the request or notify the individual of its refusal. If the information is revised or deleted by the insurer, the revision must be sent to: -Any person receiving the incorrect information in the past 2 years -Any organization that systematically received the information in the past 7 years -The source of the incorrect information
Requirements of Workers Compensation
Workers' Compensation coverage must cover all employees. This includes employees of contractors and subcontractors if those employees are injured through the negligence of the employer. Workers' Compensation coverage is optional for: -A self-employed person -A limited liability partner -A limited liability company member or partner Workers' Compensation benefits may be reduced by disability benefits received under Social Security. Compensable medical services include services provided by a chiropractor and authorized by the employer. An employee may not waive an employer's liability for on-the-job injury or death or occupational disease. Compensation may not be reduced by benefit amounts received from any association, society, or fund to which the employee has contributed.
Exportable List for surplus lines
a list of insurance coverages or risks for which there is no reasonable or adequate market among authorized insurers in New Jersey. Only listed coverages may be placed with a surplus lines insurer.
what are the penalties for a person who violates the Fraud Act
a penalty of up to $5,000 for the first violation, $10,000 for the second violation and $15,000 for each subsequent violation. If a person is found during a legal proceeding to have committed insurance fraud, a $1,000 surcharge will be assessed against him. If a person is charged with insurance fraud during a legal proceeding and the charge is resolved through a lump-sum settlement, the person will be assessed a surcharge equal to 5% of the settlement amount.
Insurance Broker
acts as the representative of an insured or prospective insured. He/she may places insurance with an insurance company but does not act as its agent.
Pretext Interviews
an interview where a person, in an attempt to obtain information about a person: -Pretends to be someone he/she is not -Pretends to represent a person he/she is not in fact representing -Misrepresents the true purpose of the interview -Refuses to identify himself/herself upon request
Compensation for temporary disability or total permanent disability
is 70% of the worker's weekly wages, at no less than 20% and no more than 75% of the state average weekly wage (SAWW). Compensation is payable for up to: -400 weeks for temporary disability -450 weeks for total permanent disability, unless the employee enters rehab. Benefits after this time may be reduced by earned wages, but must be at least $5
Insurance Agent
is authorized to sell, solicit, or negotiate insurance contracts, to collect premiums, and to countersign insurance policies on an insurer's behalf.
The Commissioner
is the administrator and chief executive office of the New Jersey Department of Insurance, whose duties include: -Administering the work of the department -Appointing officers and other department personnel -Discharging the functions, powers and duties of the department -Formulating, issuing, and communicating rules and regulations including regulation of the companies, agencies, boards, commissions, and other entities within its jurisdiction, including licensees, officers and employees -Reporting each year to the Governor and to the Legislature on the operations of the preceding fiscal year -Appointing advisory committees
Disability recipients under the age of 62
may have their benefits reduced by an amount equal to the disability benefits payable under the Federal Old-Age, Survivors' and Disability Insurance Act. This reduction will not exceed the amount established by law.
When does a producer need to notify when they move from one state to another and what are the fees and application process.
must file a change of address and provide certification from the new resident state within 30 days of the change of legal residence. No fee or license application is required.
Notice Requirements for nonrenewed or cancelled
notice has been delivered to the insured 30-120 days prior to expiration or cancellation. The notice must state the reason upon which the termination is based. If a policy is cancelled for nonpayment of premium or moral hazard, the insurer must mail notice of cancellation at least 10 days prior to cancellation. Commercial insurance policies cannot be cancelled or nonrenewed for any underwriting reason that is arbitrary or without adequate prior notice to the insured, except for new policies in effect for less than 60 days
Insurance Consultant
offers advice on the benefits, advantages or disadvantages under any insurance policy or contract. To qualify for an insurance consultant's license, an individual must be licensed as a producer.
Compensation for partial permanent
partial permanent disability is 70% of the worker's weekly wages, at no less than $35 and no more than 75% of the state average weekly wage (SAWW). 180 weeks for partial permanent disability Benefits after this time may be reduced by earned wages, but must be at least $5
1-4 family dwellings may not be Cancelled or Nonrenewed under the following conditions
solely due to claims due to weather-related damage or a third-party criminal act committed by a non-resident, unless the claim identifies: -An increase in hazard -A material change in the risk -A breach of contractual duties, conditions or warranties that materially affect the nature or the insurability of the risk
when may a commissioner issue a temporary insurance license and for how long?
the commissioner may issue a temporary insurance producer license good for up to 180 days without requiring an examination to: -The surviving spouse or court-appointed representative of a licensed insurance producer, upon the death or disability of that producer. This is to allow adequate time for: -The sale of the insurance business owned by the producer -The recovery or return of the producer to the business -The training and licensing of new personnel to operate the producer's business -An employee of a business entity licensed as an insurance producer, upon the death or disability of an individual who is responsible for the business entity's compliance with the insurance laws, rules and regulations -A licensed insurance producer's designee when the producer is entering active service in the armed forces of the United States of America
Goal of Fair act of 1990
to provide a healthy and competitive automobile insurance system in New Jersey where automobile insurers are entitled to earn an adequate rate of return through the ratemaking process.
When an individual requests access to recorded personal information what must the insurer do and within what timeframe
within 30 business days the insurer must: -Inform him/her of the nature and substance of the recorded personal information -Permit him/her to see and copy the information or to obtain a copy by mail -Identify the individuals to whom the information is disclosed -Provide a summary of the information
when must premium funds be remitted?
within 5 business days after being received unless provided otherwise by the insurance producer's contract with the insurer or written agreement with the insured.
