New Jersey Department
|For Immediate Release: October 22, 2004||
For Further Information:: Mary Cozzolino - (609) 292-5064
New Jersey Joins National Initiative to Protect Policyholders and Consumers
TRENTON - As investigations continue into alleged criminal misconduct involving insurance companies and insurance brokers, the New Jersey Department of Banking and Insurance is moving forward, along with members of the National Association of Insurance Commissioners (NAIC), on a coordinated mission to protect consumers and policyholders.
"Brokers and insurance companies that have been abusing the system for personal gain will be identified and appropriate actions will be taken to see that all consumers' concerns are addressed," said Commissioner Holly C. Bakke. "We intend to coordinate directly with state law enforcement officials in identifying and terminating this activity. In the interim, we encourage risk managers to assess whether they have been subject to these types of practices and, if so, to contact our department."
New Jersey will also be announcing further actions early next week. "We take these allegations very seriously. If there are bad actors out there we will find you, and we will hold you accountable," stated Commissioner Bakke.
The Department of Banking and Insurance has a proven track record of investigating broker fees thoroughly, holding those who abuse the system accountable and consistently acting to ensure that the consumers' best interests are protected. Over the last three years, the Department has taken action against several licensees, fining them or demanding restitution amounts totaling more than $550,000. Some of these actions resulted from consumer complaints, while others were discovered as part of the Department's routine market conduct exam process which is designed to identify those brokers, agents and other licensees who are not meeting their obligations to clients.
In a coordinated effort, Commissioner Bakke recently participated in a national discussion sponsored by the NAIC. Regulators from across the country shared information regarding several key actions already in progress in each state, including enforcement of existing state regulations addressing conflict of interest and strengthening the alignment of state departments of insurance and attorneys general.
Regulators are forming a commissioner-level taskforce whose sole focus will be to prevent future abuses and protect consumers at all levels.
"On a national level, the steering committee will utilize established interstate regulatory and exam procedures, allowing us to work in concert, across state lines when needed, to keep improper sales activities from taking place in any line of insurance," said Commissioner Bakke. "While most of the publicity has centered on abuse in the sale of commercial lines policies, it is important to note that we intend to look closely at the sales of personal lines policies as well, including the sale of employee benefits packages through the workplace."