Dec 10, 2019

Insurance-related legislation sees action in lame-duck session

Currently, the New Jersey Legislature is in lame duck session, which typically is a busy time for the legislative body as there is a mad scramble to get legislation passed before the end of session. As such, a flurry of legislation has seen movement recently, including the following:

The responsibility of contractors for wage claims against subcontractors (A-5801). This bill, sponsored by Assembly Speaker Craig Coughlin, D-19, passed the Assembly (59-6-8) on Nov. 25. The legislation would require contractors to be responsible for any unpaid wages incurred by employees of any subcontractor acting under, by, or for the contractor for the wage claimant’s performance of labor under a contract for the erection, construction, reconstruction, alteration, maintenance or repair of any building in the state, including any such contract under which workers are required to be paid prevailing wage rates set pursuant to the New Jersey Prevailing Wage Act.

As originally written, the legislation would have made the owner of the property upon which construction is taking place liable for unpaid wages. However, the legislation was amended in committee prior to its passage in the Assembly. The legislation was received in the Senate on Dec. 5 and has yet to be referred to a committee.

According to the statement for the legislation, the purpose of this bill is to advance the well-established state concern of ensuring the full payment of employees as required by law by enhancing available remedies in certain cases of illegal failure to provide compensation to employees, without reducing any existing remedies.

Protections for insurers, cannabis-related businesses (A-6022). The legislation, sponsored by Assemblyman Joe Danielsen, D-17, would create protections for insurers engaging in the business of insurance in connection with cannabis-related businesses.

Specifically, the bill would prohibit the state or local government agency from penalizing, or otherwise discouraging an insurer from engaging in the business of insurance in connection with a cannabis-related business. This would include terminating, canceling or otherwise limiting the policies of an insurer solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business or taking any adverse or corrective supervisory action on an insurance policy against a cannabis-related business or a person that does business with or is employed by a cannabis-related business, solely because the business or person owns or operates or does business with or is employed by a cannabis-related business

The legislation was introduced on Dec. 5, and it referred to the Assembly Financial Institutions and Insurance Committee. Similar legislation that would create safe harbors for insurers providing services to legal cannabis business is moving through the U.S. Congress.

Establish a motor vehicle insurance compliance program (A-6023). This bill, also sponsored by Assemblyman Danielsen would establish an “Uninsured Vehicle Enforcement and Compliance Program” and an “Uninsured Vehicle Enforcement Diversion Program.” Under the “Uninsured Vehicle Enforcement and Compliance Program,” counties, municipalities and law enforcement agencies would have the authority to enter into contractual agreements with automated license plate reader providers to provide the necessary technology and equipment. A law enforcement agency would be permitted to utilize the automated license plate readers for the purpose of enforcing the requirement that drivers maintain motor vehicle liability insurance. Specifically, law enforcement officers would be permitted to utilize automated license plate readers to determine whether a driver is uninsured. The bill also would require law enforcement officers to have access via computers located in law enforcement vehicles to the information contained in the insurance database maintained by the Motor Vehicle Commission.

The legislation was introduced on Dec. 5, and it was referred to the Assembly Law and Public Safety Committee.

Submit corporate governance annual disclosure to DOBI (S-4287). This bill, sponsored by Sen. Nellie Pou, D-35, would require an insurer or insurance group to submit an annual report to the commissioner of Department of Banking and Insurance to summarize its corporate governance structure, policies and practices.

As currently written the legislation would not apply to insurance producers as they meet neither the definition of insurer or insurance group, which included insurers and their affiliates in an insurance holding company system.

This legislation was introduced on Dec. 5 and it was referred to the Senate Commerce Committee. Identical legislation (A-6007) was reported out of the Assembly Financial Institutions and Insurance Committee on Dec. 5.