Despite last-minute changes in the Assembly Financial Institutions Committee to narrow the legislation, A4293 was pulled from the board list on the last day of Lame Duck.
It was an impressive victory for our friends at ICNJ and the rest of our allies who spent much of this past legislative session, consistently making the case that the expansion of bad faith remedies would serve primarily to facilitate insurance fraud and impose higher premiums on consumers.
Although the senate version moved quickly and was voted out of that chamber in June of 2018, the legislation lingered in the Assembly without even a committee hearing until Lame Duck. And when the legislation was finally released from AFI, it was limited to first party uninsured or underinsured auto policy claims.
Of course, even in that limited context the penalties would be tremendously disruptive to the insurance market, especially given the unlimited damages of the full jury verdict regardless of policy limit, plus attorney fees. And it seemed that members were ultimately persuaded that such an extreme remedy would be a disservice to relatively low-income consumers seeking the most affordable insurance options available.
Also of note: there were suggestions during the debate over Bad Faith that the minimum policy limits required by law might be too low. Although Senator Scutari has not pre-filed his Bad Faith legislation for reintroduction, he has reintroduced legislation that would significantly increase the minimum limits.
Please email Alida if you would like to discuss this issue further.