Continuing New Jersey’s inquiry into recent national allegations of wrongdoing by segments of the insurance industry, Commissioner Holly C. Bakke has issued an order seeking information from major New Jersey brokers. Information regarding brokers’ contracts, compensation agreements and business practices involving insurers is being sought for review.
“New Jersey is moving quickly to get to the bottom of this issue to assure that consumers are protected in the insurance marketplace,” said Bakke.
Current criminal investigations in New York and other states into the sales practices of insurance companies and brokers have prompted regulators nationwide to gather information on sales practices in their respective states. The National Association of Insurance Commissioners has established a nationwde task force. Bakke has also set up an internal unit, headed by Assistant Commissioner Lee Barry, to analyze the information provided under her order.
“New Jersey’s dynamic, competitive insurance marketplace is built on a foundation of solid consumer protection. Our job as regulators is to safeguard that foundation, by enforcing the laws and identifying potential problems for consumers,” stated Bakke.
Bakke’s order requires that licensed producers doing substantial business as brokers in New Jersey turn over any and all information regarding compensation and fee arrangements with insurers. Under the order, brokers must submit actual contracts, letter agreements, and other communications.
The department had previously issued a bulletin reminding brokers of their legal and ethical obligations under New Jersey law.
The order was issued to the largest brokerage houses in New Jersey.
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