Feb 18, 2020

PIANJ successfully adds insurance producers to cannabis safe-harbor legislation

Legislation (A-377) that would provide certain protections to insurers and insurance producers who engage in insuring cannabis-related businesses was reported out of the Assembly Financial Institutions and Insurance Committee Feb. 13. The bill is sponsored by Assemblyman Joe Danielsen, D-17.

According to the bill, a state or government agency would not be able to:

• prohibit, penalize, or otherwise discourage an insurer or insurance producer from engaging in the business of insurance in connection with a cannabis-related business;
• terminate, cancel, or otherwise limit the policies of an insurer solely because the insurer or insurance producer has engaged in the business of insurance in connection with a cannabis-related business;
• recommend, incentivize, or encourage an insurer or insurance producer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance and insurance services offered to a policyholder solely because the policyholder is or becomes the owner, operator, or employee of a cannabis-related  business; or
• take 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.

In its original draft, the bill only applied to insurers. However—recognizing the importance of extending the protections of this bill to insurance producers—PIANJ helped to craft language to ensure insurance producers were not exposed to penalties for assisting legal cannabis businesses with their insurance needs.

This legislation is needed as more states legalize medicinal and/or recreational marijuana, which still is considered an illegal substance by the federal government.

PIANJ supports this legislation and will continue to advocate for the protection of independent insurance producers.