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  1. Record retention—receipts | Ask PIA

    What should we do if we don't have a policy number to put on a receipt that we give to a customer who makes a premium payment in cash? Isn't the policy number supposed to go on a receipt?

    No, the policy number is not necessary. The regulation setting the standards for receipts issued by producers (N.J.A.C. 11:17C-2.4) states that receipts must be issued “for each premium for any payment, premium deposit or installment payment which is submitted by personal delivery or when a receipt is requested.” Producers must...

  2. Nonresident excess/surplus placements | Ask PIA

    We have a New Jersey resident producer license with surplus-lines authority. We also have a New York broker’s license, but we do not hold a New York excess-line license. On occasion, we have placed New York residents or New York-based risks in carriers which are not admitted in New York...

    Unless you hold a New York excess-line license, you are prohibited from the activity you describe. Section 2117 of the New York Insurance Law prohibits a broker from soliciting, negotiating or in any way effectuating or aiding an unauthorized insurer in effecting any insurance contract, except pursuant to the specific...

  3. Contestability-group health | Ask PIA

    What is the incontestability period for small group health policies in New Jersey? We have a carrier that is trying to rescind a policy because of an allegedly undisclosed medical condition.

    Small employer group health policies contain a statement that “there will be no contest of the validity of this policy, except for not paying premiums, after it has been in force for two years from the effective date.” However, this provision is significantly qualified by the subsequent fraud exception:“No statement...

  4. Nonrenewals of personal auto policies | Ask PIA

    Could you review the limitations on nonrenewals of personal auto policies? Do these limits apply to terminated agents’ business as well?

    Detailed rules governing personal automobile policy nonrenewal standards are found in N.J.A.C. 11:3-8. These apply to policies covering an “automobile” as defined in N.J.S.A. 39:6A-2(a), excluding those owned by business entities or insured through any residual-market mechanism. These nonrenewal standards apply equally to policyholders of active and terminated agents. ...

  5. Return premium time frames, calculation | Ask PIA

    We have a brokerage agreement with a carrier that states nothing about when the carrier will return any unearned premium due the insured if the insured decides to cancel. Is there anything in the law that addresses this?

    Yes. N.J.S.A. 17:29C-4.1 states: “Whenever an insurance policy or contract is canceled, the insurer on notice thereof shall return to the insured, within a reasonable time not to exceed 60 days of cancellation or notice, whichever occurs last, or 60 days after the completion of any payroll audit necessary to...

  6. Midterm cancellation—household driver | Ask PIA

    We insure a personal auto risk where there are three vehicles in a family consisting of a mother, father and two children. The company is cancelling the entire policy because the father has been convicted of driving while intoxicated (DWI). Can they do this?

    Yes. The Department of Banking and Insurance’s midterm cancellation rules permit midterm cancellation of a Personal Auto Policy (even when one or more eligible persons are insured under the policy), when a person insured under the policy who either resides in the same household or who customarily operates a vehicle...

  7. Duty of care | Ask PIA

    What is the duty of care that an insurance producer owes to a client to place business with a financially secure carrier?

    A 1994 New Jersey Supreme Court case set forth the specific duty an insurance producer acting as a broker owes to an insured regarding financial solvency of a carrier. The case, Carter Lincoln-Mercury Inc. v. EMAR Group Inc., was the first to extend a producer's common-law duty of care to...

  8. When a producer resigns | Ask PIA

    What are our responsibilities when an employed producer resigns?

    An employer agency does not have any required responsibilities when they have entered into an employment contract with an employee producer. However, it may be sound business practice to notify your insurance carriers when a licensed employee has left your employment. Also, you may want to notify your E&O carrier...

  9. Multi-state risk | Ask PIA

    We have a multi-state commercial risk. We do not think the insurer has provided the correct notice of the renewal premium.

    Multi-state risks are not covered by the detailed policyholder provisions that spell out the notice requirements for nonrenewals, cancellations, renewal premiums, changes in contract terms, etc. The same is true of policies that are subject to retrospective rating plans. These types of policies are granted only some general protections by...

  10. Waivers of subrogation | Ask PIA

    Are “waiver of subrogation” endorsements permitted in New Jersey on workers’ compensation policies?

    No. According to the New Jersey Compensation Rating and Inspection Bureau, “A waiver of subrogation endorsement is not an approved option with respect to a New Jersey Workers’ Compensation and Employers’ Liability Insurance Policy.” NJCRIB lists several reasons: NJCRIB’s rate-setting responsibility under law, which changes the bureau to fix rates...

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