The New Jersey Supreme Court ruled that an auto insurance agent cannot bring an action under the provisions of the State’s Fair Automobile Insurance Reform Act of 1990 to recover damages from the insurance company who terminated the agency agreement, as agents “are not within the class of persons FAIRA was designed to protect.”
National Consumer Insurance terminated the contract of the R.J. Gaydos Insurance Agency for submitting a high volume of unprofitable business. Gaydos sued for breach of the agency contract, and also sought recovery under FAIRA. The court upheld the right to litigate the contract, but denied relief under the Act, unless the Insurance Department had first made a finding that there had been a violation of one of its provisions.
Under those circumstances the court indicated that the agent might seek relief. Commenting on the decision David F. Snyder, AIA asst. general counsel, validated the general principle that “contracts should define the insurer/agency relationship.”|”agency, not, covered, by, faira, says, nj,
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