N.J. State Senator Nicholas Scutari (D-22nd Dist.) introduced Senate Concurrent Resolution No. 105 (the “Resolution”), which is critical of a proposed amendments by the New Jersey Department of Banking and Insurance (the “Department”) affecting the personal injury protection (“PIP”) regulations promulgated under the Automobile Insurance Cost Reduction Act of 1998 (the “Act”). The Resolution was referred to the Senate Commerce Committee for consideration.
According to the Resolution, the Department’s proposed amendments to the PIP regulations are inconsistent with the plain language of the Act and are, therefore, contrary to the legislative intent of the Act. The Resolution cites the following inconsistencies:
- The proposed amendments “provide for a uniform process in which insurers can require that a [medical] provider shall have filed for an internal appeal before filing for arbitration, thereby formalizing a mandatory internal appeal process, which is contrary to the legislative intent as provided in the [A]ct.”
- The proposed amendments “provide that certain PIP arbitrations, in which the demand is less than $1,000, be decided by the dispute resolution professional based on the papers submitted without an in-person hearing or argument in contrast to the intent of [the Act], which provides for a . . . dispute resolution proceeding.”
- The proposed amendments “establish a process for determining the reasonableness of attorney’s fee awards despite the fact that the [Act], specifically provides that the reasonableness of fees is to be determined . . . in accordance with a schedule established by the New Jersey Supreme Court.”
- The proposed amendments “contradict and fail to adequately comply with provisions of the law requiring [the Department] to establish fee schedules and adjust those schedules for inflation biennially.”
The Resolution provides that the Department will have 30 days to amend or withdraw its proposed amendments, or the New Jersey Legislature may, by passage of another concurrent resolution, exercise its authority to invalidate the Departments proposed amendments in whole or in part.
In January, when the Department released its latest version of its amendments to the PIP regulations, Insurance Commissioner Tom Considine stated they were “. . . the result of many months of hard work, discussion and collaboration with interested parties and stakeholders, consistent with Governor Christie’s transparent approach to rulemaking. The end product will be an improved auto insurance market that protects consumers and increases competition and choice.”