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Last month the New
Jersey State Senate introduced the “Consumer Protection Act,” (S-2460), a bill
that would establish a private cause of action for insureds in connection with
unfair claims settlement practices; a right previously articulated by the State
Supreme Court in Rova Farms Resort Inc.
v. Investors Ins. Co., 65 N.J. 474 (1974).
Specifically, the proposed bill would allow an insured, regardless of any action by the Commissioner of Banking and
Insurance, to file a civil action against its insurer for any violation of the
provisions of subsection (9) of N.J.S.A. 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.
The
legislation also provides that upon establishing a violation of N.J.S.A.
17:29B-4(9), an insured is entitled to recover the full amount of damages set
forth in the final judgment, pre-judgment interest, reasonable attorney’s fees, and
punitive damages where the insured can prove actual malice or wanton and
willful disregard.
If enacted the
legislation would take effect immediately and apply to all claims filed or on
after October 1, 2012.
Download S-2460
