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  1. Surplus-lines tax—tax-exempt entities | Ask PIA

    Our client is a church. We placed the coverage in the surplus-lines market. The church officers say the church is tax-exempt, so they do not feel they should have to pay the surplus-lines premium tax. Is this correct?

    No, the tax mandated in N.J.S.A. 17:22-6.59 is a premium tax levied on insurance companies. Licensed insurance companies include premium tax expenses in the premiums they charge to policyholders. Since unlicensed insurers do not directly pay the required tax, it is collected by the surplus-lines broker as an identifiable charge, as...

  2. Lead-paint certification | Ask PIA

    What is the law in New Jersey regarding lead-paint certification?

    Regulations have been adopted by the New Jersey Department of Community Affairs setting forth standards for determining that a premises is essentially lead-free. If a property has received the DCA certification, an insurer may not apply an exclusion to coverage for liability for lead exposure. Otherwise, policies that were...

  3. Advertising “no phone quotes” | Ask PIA

    Can a producer advertise that it provides “no phone quotes”?

    According to the Department of Banking and Insurance, a producer cannot advertise “no phone quotes.” Although in response to an oral request for a quotation, agents must only provide the minimum information set forth in the regulation concerning rate levels in the applicable territory and are not required to provide...

  4. Volunteer firefighters—other duties | Ask PIA

    We write a workers’ compensation policy for a volunteer fire department. Because they cannot get a reasonably priced service to cut the grass, they pay volunteer firefighters to mow their lawn. Does the classification need to be amended to reflect this exposure?

    No. Code 7711 (Firemen—Volunteers and Drivers) includes authorized maintenance or repair work upon the premises owned or used by the fire company; see the class description in your manual. Also note that N.J.S.A. 34:15-43, defining public employees within the meaning of the Workers’ Compensation Law, as applied to members of...

  5. Limited insurance representatives | Ask PIA

    What does the New Jersey limited-lines authority include?

    According to N.J.A.C. 11:17-2.2(9), the following kinds of insurance may be marketed through a limited-lines producer: bail bonds, credit insurance, group mortgage cancellation, legal expense insurance, car rental, travel insurance, pet insurance, portable electronics insurance and self-storage personal property insurance.

  6. Employment practices liability insurance is a ’special risk’ | Ask PIA

    We’d like to confirm whether employment practices liability is exempt from rate and form filings in New Jersey.

    Yes, employment practices liability is exempt from rate and form filing requirements under N.J.S.A. 17:29AA-5 and 17:29AA-6. These sections exclude “special risks,” and the definition of “special risks” includes those listed on the “surplus-lines exportable list.” Employment practices liability was added to the exportable list effective Nov. 17, 1997. For...

  7. Surplus-lines cancellation | Ask PIA

    I have a New Jersey property account which has been in effect for more than 60 days. Now the company is canceling it due to a loss. The company is nonadmitted. Is this legal?

    Yes. New Jersey Insurance Regulation Section 11:1-20, which restricts an insurer’s right to cancel, does not apply to “workers’ compensation insurance, employers’ liability, fidelity, surety, performance and forgery bonds, ocean marine and aviation insurance, and accident and health insurance or any policy written by a surplus-lines insurer.” Consequently, the cancellation...

  8. Which law prevails? | Ask PIA

    We have a personal auto client, a New Jersey resident, who was injured while driving a New Jersey-registered company car in New York state. Does the personal auto policy respond as primary coverage (because New Jersey PIP coverage follows the insured), or does the company’s business auto policy respond as...

    To resolve issues involving “conflict of laws,” one must navigate through a very complex branch of jurisprudence. The result may depend on which court has been petitioned, whether that court has jurisdiction, the criteria used by that court and the specific facts of the case. It appears that if a...

  9. Banks’ rights to reject homeowners companies | Ask PIA

    What are the restrictions on a bank’s right to reject the insurance company that a mortgage borrower selects to provide homeowners insurance? We just had a policy rejected because the bank said the hurricane deductible was too large.

    The bank has broad authority in this regard under Insurance Law. Section 2502(a) prohibits mortgage lenders from requiring, as a condition of granting the loan, that the borrower “negotiate any policy of insurance or renewal thereof covering such property through a particular insurance company, agent or broker.”Nevertheless, the law does not...

  10. PAIP policies | Ask PIA

    If a PAIP policy is canceled for nonpayment and we must re-apply, can we charge a second service fee for the second application?

    Yes. See N.J.A.C. Section 11:17B-3.2(a)(6) and (9). You are restricted to charging one fee “per policy per year.” Another fee, not to exceed $20, may be charged on a new policy written.

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