New Jersey Commissioner Caride Provides Guidance to Regulated Entities Regarding Pre- and Post-Disaster Regulator Activity

Insurance Law Alert

November 19, 2019

Cynthia J. Borrelli

Cynthia J. Borrelli

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On November 6, 2019, New Jersey Department of Banking & Insurance Commissioner Marlene Caride issued Bulletin No. 19-10 to insurers, health service corporations, medical service corporations, hospital service corporations, dental service corporations, health maintenance organizations, dental plan organizations, organized delivery systems, prepaid prescription drug service organizations, and third party administrators, as well as licensed producers and public adjusters, regarding certain pre- and post-disaster regulatory guidance. The purpose of the guidance is to aid regulated entities in preparing for a disaster and to be as responsive as possible with regard to claims processing and recovery efforts. Pre-disaster actions discussed in the Bulletin include:

Activation of catastrophe response plans. Depending on the severity of the conditions, regulated entities may be required or requested to take measures which include, but are not limited to, suspension of cancellation and non-renewal of policies for reasons related to the occurrence of the disaster or catastrophe, and utilization of expedited and simplified claims processing in order to promptly service claims and provide other essential services to insureds affected by a disaster.

Post-disaster recovery actions include forbearance of policy cancellation or non-renewal, processing of claims on an expedited basis, affording mediation through a non-binding program following a declared emergency to facilitate resolution of open and unresolved claims for damages resulting to the disaster, claims data reporting to the Commissioner, and, in the event that the Commissioner issues an order or bulletin, reduction of the timeframe for carriers to respond to Departmental inquiries regarding disaster events. The Bulletin also warns regulated entities that in the event of a disaster, the Commissioner will issue orders or bulletins and strictly enforce prohibitions against price gouging and excessive fees, may provide further guidance regarding the use of mandatory and optional hurricane deductibles, mandate expedited activity to enhance access to disaster-impacted areas, and may request other activity on a consensual basis to assure that victims of disasters are timely serviced and that all claims are timely reviewed and paid.

By separate Bulletin No. 19-09, the Department requested that all regulated entities update their contact information with the Department with regard to disaster preparation plans.

Copies of Department Bulletin Nos. 19-09 and 19-10 are linked here, and questions should be directed to Cynthia Borrelli at Bressler, Amery & Ross.