Last week, the Pennsylvania House Insurance Committee held a public hearing to discuss a bill introduced to create an independent office that would give a voice to the state’s consumers in insurance matters. The proposed Office of Consumer Advocate for Insurance is designed to protect the largely unprotected and neglected insurance consumer in Pennsylvania. The office would possess the authority to represent citizens’ best interests on any insurance matter before the state Department of Insurance or any other state agency or court.
New Jersey should follow Pennsylvania’s lead, which is a first step in the right direction. Many states have long had “bad faith” insurance laws in place. Connecticut has its “Connecticut Unfair Insurance Practices Act” (CUIPA) which holds insurance companies accountable when they act in bad faith by either refusing reasonable settlement offers or by their outright denial of meritorious claims. CUIPA is a law with bark and bite; it imposes fines and sanctions for egregious offenders. Unfortunately, New Jersey’s legislature has been hijacked by the powerful insurance lobby and here, as opposed to other states, we as consumers, have no real way of holding insurance companies accountable when they breach their fiduciary duty to their insureds. Here in New Jersey the insurance companies are accountable to no one except their shareholders.