Alert
06.17.2016

The New Jersey Department of Banking and Insurance has issued a Bulletin to provide regulatory guidance to insurers regarding pre- and post-disaster activity. A copy of the bulletin is linked here.  Such activity includes, but is not limited to, the issuance of bulletins under orders which would likely be undertaken by the Commissioner pursuant to the emergency powers granted by N.J.S.A. App. A:7-1, shortly before or following a declaration of a state of emergency by the Governor related to a disaster, such as Super Storm Sandy.

As stated in the Bulletin, regulatory activity will be tailored, as appropriate, based on the nature of the disaster and the perceived impact upon New Jersey policyholders.

The purpose of the Bulletin is to enable insurers, insurance producers, and public adjusters transacting business in New Jersey to become familiar with the content of potential pre- and post-disaster regulatory measures. The measures expressly identified in the Bulletin include:

1. Pre-Disaster Actions:

  • Activation of catastrophe response plans;
  • Marshaling all appropriate resources to secure operations and provide timely assistance to insureds;
  • Producer licensees are encouraged to take necessary action to ensure ability to promptly service claims and provide other essential services to insureds who might be affected by a disaster.

2. Post-Disaster Actions:

  • Forbearance of policy cancellation or nonrenewal;
  • The Department strongly encourages flexibility and relaxation of documentation and/or other requirements on matters such as notice of hospital admission, due dates for filings, pre-authorization, administrative changes such as additions, terminations and continuations, periodic proof of disability, late fees, and limits or exclusions for prescription refills with respect to damaged or lost prescriptions;
  • Processing of claims;
  • The Department urges insurers, licensees and interested persons to take immediate action upon notice of a claim to promptly establish contact with the claimant, promptly survey and assess damages, provide prompt and accurate responses to claimants, provide prompt payment, including advances, for additional living expenses and for temporary repairs after the assessment of the insured’s damage, and to promptly set appointments with the claimant for examination and resolution of all claim matters;
  • Mediation, on a non-binding basis, to facilitate resolution of open and unresolved claims for damages resulting from disaster;
  • Claims data reporting to help the Commissioner assess damage due to disaster;
  • Timeframes to respond to Departmental inquiries may be reduced for carriers concerning disaster events so that the Commissioner can quickly assess the need for additional regulatory initiatives;
  • Price gouging and fee issues following a disaster are prohibited by J.S.A. 56:8-107 et seq. Reports of such activity should be submitted to the Division of Consumer Affairs within the Department of Law and Public Safety;
  • Access issues may be addressed to facilitate the ability of adjusters to quickly reach areas impacted by disaster;
  • Hurricane deductibles (if applicable); Bulletins may provide guidance to insurers regarding the use of mandatory and optional hurricane deductibles in connection with any applicable triggering event pursuant to J.A.C. 11:2-42.7;

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