New Jersey Governor Chris Christie signed into law Monday new legislation that aims to crack down on fraudulent insurance certificates.
The Certificates of Insurance Act makes it illegal to prepare, issue, request or require the issuance of insurance certificates that contain any false or misleading information. The law authorizes the New Jersey Department of Banking and Insurance to enforce the stipulations, which will go into effect on April 10 – 90 days after Christie’s signing.
Under the terms of the new Act, the state insurance commissioner is authorized to issue orders issue orders to cease and desist, and to impose a fine of up to $1,000 per violation against offenders. The commissioner may also adopt rules and regulations necessary to put into effect all of the new law’s provisions.
Certificates of insurance, which are typically issued by insurance agents, are used by clients like contractors to demonstrate that they have insurance policies with coverage limits required to enter into business contracts.
The provisions of the law apply to all certificates of insurance issued in connection with property, operations, or risks located in New Jersey, regardless of where the policyholder, insurer, agent or person requesting the issuance of the certificate is located.
The Professional Insurance Agents of New Jersey celebrated the law’s passage as beneficial for consumers as well as insurance agencies, brokerages and their employees. The trade group had testified in favor of the legislation during hearings of the Assembly Financial Institutions and Insurance Committee and the Senate Commerce Committee last month.
“PIANJ commends Governor Christie, Assemblyman Gary S. Schaer, D-36, Senator Nia H. Gill, D-34, the bill’s prime sponsors, and the eight other legislators who shepherded this important legislation into law,” said PIANJ President Charles J. Caruso.
“This law will protect New Jersey’s insurance-buying community and their insurance agents, who will not have to address impossible demands from third parties.”
