Topic: New Jersey Developments

New Jersey Joins the Interstate Insurance Product Regulation Compact

On January 6, 2011, New Jersey Governor Chris Christie signed legislation on the Interstate Insurance Product Regulation Compact (the “Compact”).  With the passage of this legislation, New Jersey becomes a member of the national commission that develops uniform standards and consumer protections for asset-based insurance products (e.g., life insurance, annuities, disability income and long-term care insurance).  The Compact also establishes a clearinghouse for review of these product filings. 

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New Jersey Senate Makes Progress On Captive Insurance Bill

This updates our November 1, 2010 posting.  On December 6, 2010, the New Jersey Senate Commerce Committee passed S.168 (the “Bill”) by a vote of 4-0, which would permit a captive insurance market to exist in New Jersey.  The Bill is based on Vermont’s captive insurance bill, which is viewed as the state model with the best design for the captive insurance market so far. 

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Third Circuit Affirms District Court’s Vacatur of Arbitration Award, Finding That the Panel Exceeded its Powers by Awarding Relief Not Sought by Either Party

The U.S. Court of Appeals for the Third Circuit recently affirmed a District Court’s vacatur of an arbitration award because the arbitration panel exceeded its authority in ordering relief not sought by either of the parties and removing from the parties’ reinsurance agreement a material provision. 

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Captive Bill Passed By New Jersey Assembly; Next Stop New Jersey Senate

This updates our May 13, 2010 posting.  On October 25, 2010, the New Jersey Assembly passed A.2360 (the “Bill”) by a vote of 77-0, which would permit a captive insurance market to exist in New Jersey.  The Bill is based largely on Vermont’s captive insurance bill, which is generally viewed as the state model with the best design for the captive insurance market so far. 

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New Jersey Issues Reminder to Surplus Lines Brokers that the $50 Limitation for Fees Charged to Originating Brokers is Still in Effect

Earlier this month, New Jersey Department of Bank and Insurance Commissioner Thomas Considine issued Bulletin No. 10-19 reminding surplus lines brokers that the $50 limitation remains in effect for fees charged by surplus lines brokers to originating brokers.  P.L. 2010, Chapter 42, which was enacted on July 6, 2010, amends N.J. Stat. Ann. § 17:22A-38b to allow for the Commissioner to set the fee limitation by regulation, however, it is not effective until October 1, 2010. 

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New Jersey Federal Court Finds That Arbitration Award Was Not in Manifest Disregard of the Law

Plaintiff moved to vacate an arbitration award issued in favor of defendant Stroehmann Bakers on the grounds that, among other things, the arbitrator’s decision was in “manifest disregard of the law.”  The U.S. District Court for the District of New Jersey, relying upon Third Circuit case law, noted that plaintiff was required to establish that the arbitrator’s award had absolutely no support from the record in order to prevail on this basis.  The court found that plaintiff had failed to meet the standard for manifest disregard of the law, and thus denied plaintiff’s motion to vacate. 

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Third Circuit Revives Limited Portions of In Re: Insurance Brokerage Antitrust Litigation (MDL 1663)

Nearly three years after a federal district court dismissed with prejudice a nationwide class action alleging antitrust and RICO claims against insurers and brokers in connection with contingent commission arrangements, the Third Circuit Court of Appeals has revived a limited swath of plaintiffs’ claims.  The Third Circuit concluded that plaintiffs’ allegations regarding contingent commission arrangements alone were insufficient to support antitrust and RICO claims. 

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World Cup Insurance Estimated at Over 6 Billion Pounds

According to an estimate provided by Lloyd’s of London, over £6.2 billion worth of insurance coverage has been purchased by individuals and entities in connection with the 2010 FIFA World Cup, which begins today.  Over half of that amount is for coverage for stadiums and training facilities, which reflects the vast amount of money that has been spent constructing and upgrading stadiums ($5.5 billion, according to the New York Times). 

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New Jersey Insurance Commissioner Praises Captive Insurance Bill and Unveils Reinsurance and Surplus Lines Initiative

In a news release issued by the State of New Jersey Department of Banking and Insurance (“DOBI”) on May 7, 2010 (the “News Release”), DOBI Commissioner Tom Considine applauded two pieces of proposed legislation which, he said, “would make some common sense changes to regulation and allow captive insurers, and carriers of reinsurance and surplus lines to operate more expansively in New Jersey.” 

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