New Jersey Governor James McGreevey signed a bill into law this week that protects agents’ ownership and commission rights when insurance policies are transferred from one company to another. The Professional Insurance Agents of New Jersey Inc. hailed the law’s enactment as “vital.”
“This law will protect the livelihood of thousands of independent agents-small business owners throughout the state-by safeguarding information obtained and used to provide their clients with professional service,” stated PIANJ President John D’Agostino Jr., CIC. “It is perhaps the most important legislation PIANJ has taken on in New Jersey in recent years.”
PIANJ initiated the legislation, Chapter 153, P.L.2003 (A-3319/S-2385), which was passed unanimously both by the Senate in June and the Assembly in May. The bill’s prime sponsors were Assembly Banking and Insurance Committee Chairman Neil M. Cohen, D-District 20, and Committee member Christopher “Kip” Bateman, R-District 16, in the Assembly and Senator Stephen Sweeney, D-District 3, and Senate Republican Leader Robert Singer, R-District 30, in the Senate.
The measure covers the situation that arises when an insurance company ceases to write business and finds another company to assume its obligations to provide coverage. It will transfer policy information to the new company so it can offer coverage to policyholders. “This information, known as ‘policy expirations’ or ‘renewal rights,’ is a fundamental asset that has come into jeopardy in recent years, as transfers of business have increased, including several companies that discontinued and transferred their personal automobile insurance business,” said the PIANJ’s announcment.
“This is a significant victory for insurance producers throughout the state,” PIANJ immediate past President David Madara commented. “The information we have defended is the foundation of customer relationships that take years to develop. We are very pleased that the governor and the Legislature have recognized the importance of protecting the most valuable assets an agent has when a company decides to transfer its business.”
Was this article valuable?
Here are more articles you may enjoy.