New Jersey Acting Governor Richard J. Codey today signed into law a bill that restores the Department of the Public Advocate as a government watchdog to act on citizen complaints on insurance, utilities and other issues. The position was eliminated in 1994.
“For more than two decades the Public Advocate was an indispensable part of New Jersey government, a champion of ordinary people with real needs but without political capital,” Codey said. “Today we are accomplishing another goal I laid out in the State of the State address, by restoring that voice to the people of New Jersey.”
Under the new law, the Department of the Public Advocate will be established on January 17, 2006. The advocate will be appointed by the incoming governor, and serve during that governor’s term of office.
The public advocate will be charged with acting on ordinary citizens’ complaints about the action or inaction of state agencies; overseeing utility and insurance rates and charges; representing people with mental illness, those with developmental disabilities, children and the elderly; and representing the public interest in administrative and court proceedings.
The governor’s signing set off complaints from the insurance industry.
The Property Casualty Insurers Association of America said the new position would cause “excessive and unnecessary regulatory burdens.”
According to PCI, the creation of a division of rate counsel within the new agency would work against New Jersey’s auto insurance regulatory reform, adopted in 2003, which is bringing new insurers to the market and encouraging existing companies to stay or expand in the market.
PCI said that its members operating in states with such advocates report that it often takes longer for approval of the filing since the advocate is slow to act, combative with the insurance department and prolongs the rate review process.
The public advocate bill, A-1424, will duplicate the role of existing state offices, delay the process of rate-setting and will not benefit the state’s consumers, according to PCI.
“There is no evidence that the creation of these additional ‘consumer advocate’ programs is effective, necessary or beneficial to consumers,” said Richard Stokes, regional vice president for PCI. “In states with these offices, such as Massachusetts and Rhode Island, personal lines insurance rates remain among the highest in the country, just as they were in New Jersey when the Division of Rate Counsel existed prior to its elimination. These states also represent some of the least competitive insurance markets with very few insurers writing policies.”
“We are very disappointed with today’s action,” added Stokes. “This is a big step backwards in the effort to reform the state’s auto insurance marketplace.”
Codey was joined at the bill signing by Assemblyman Wilfredo Caraballo (D-Essex, Union), who is a former public advocate; Senator Joseph F. Vitale (D-Middlesex); and Lauren Skowronski, executive director of Common Cause New Jersey.
The bill’s sponsors include Caraballo, Vitale, Senator Robert J. Martin (R-Morris, Passaic), Assemblyman Alfred E. Steele (D-Bergen, Passaic), Assemblyman John J. Burzichelli (D-Cumberland, Gloucester, Salem), and Assemblyman Mims Hackett (D-Essex).
“The restoration of the public advocate will once again give voice to the voiceless, and ensure that government is truly accountable to the needs of the people,” said Vitale. “The agency will stand as a watchdog, independent of interference from within the bureaucracy, and able to take the state to court if need be in order to accomplish its goals. With a strong public advocate in place, New Jersey will have another level of scrutiny that will only benefit the state’s residents and keep government serving the public, and not corrupt politicians.”
Caraballo also applauded the signing. “The elderly, developmentally disabled, mentally ill and indigent lost a strong voice and a trusted ally in Trenton when the Department of the Public Advocate was dissolved in 1994. New Jersey needs the Public Advocate more than ever before now that the federal government is trying to privatize Social Security and slash funding for Medicaid and other programs critical to our seniors and those with marginal incomes,” he said.
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