N.J. Insurance Commissioner Issues Bulletin on Professional Liability Coverage for Reservists Called to Duty

April 22, 2003

New Jersey Insurance Commissioner Holly C. Bakke has issued an official bulletin reminding insurance carriers that doctors and other professionals called to active duty in the Iraq war have the right to suspend their malpractice insurance policies during their service, and that insurers cannot cancel the policies or require premium payments, if they do so.

The regulatory announcement follows a call be the state’s Governor, James E. McGreevey, on April 1, for the Department to take action to protect professional members of the reserves called to active duty. “These protections are essential to ensuring that our brave service-people can serve our country without having to worry about missing a premium payment on a professional liability policy, as well as whether their coverage will lapse,” said the bulletin.

It covers persons with professional liability insurance policies who are ordered to active duty, and “prevents a professional liability insurance carrier from requiring premiums to be paid by or on behalf of a person called to active duty for any professional liability insurance coverage that has been suspended, when a written request by such person has been received by the insurance carrier.”

Carriers are also required to reinstate coverage on the date that a written request for reinstatement of coverage is submitted, “but only if received within 30 days from being released from active duty.” The carrier is then required to notify the person of the due date for payment of the premium, which is to be paid within 30 days after the receipt of the notice.

“The period for which professional liability insurance coverage shall be reinstated may not be less than the balance of the period for which coverage would have continued under the insurance policy if the coverage had not been suspended,” said the bulletin.

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