Is Anyone Currently Watching the Conduct of Insurance Companies?
by Charles Bryant, AASP/NJ Executive Director
Based on what’s currently occurring in New Jersey collision shops, it doesn’t seem like anyone is monitoring the conduct of insurance companies…or maybe whoever oversees the conduct of insurers is simply looking the other way.
Well, let’s take a close look at the rules that insurers are supposed to be following and see if we can figure out exactly what’s going on.
The following is an overview of the regulations governing the conduct of insurers during the claim settlement process of auto property damage claims:
New Jersey Administrative Code
Title 11. Department of Banking and
Insurance Division of Insurance
Chapter 3. Automobile Insurance
Subchapter 10. Auto Physical Damage Claims
11:3-10.1 Scope
This subchapter applies to claims arising under motor vehicle collision and comprehensive coverages.
The following subjects are addressed in the regulations and define what an insurer can and cannot do during the claim settlement process, including time limits to perform or address any issue covered in the following sections of the regulations:
11:3-10.2 Definitions
11:3-10.3 Adjustment of partial losses
11:3-10.4 Adjustment of total losses
11:3-10.5 Unreasonable delay
11:3-10.6 Loss of use
11:3-10.7 Subrogation agreements
11:3-10.8 Repair estimates
11:3-10.9 Referral of insured to the at-fault party
The following is the section of the regulations that requires the New Jersey Department of Banking and Insurance (NJ DOBI) to perform market conduct examinations on a regular basis to ensure that insurers are complying with the regulations governing Fair Claim Settlement Practices. These Market Conduct Examination Reports have been placed on the NJ DOBI’s website for as long as I can remember so that anyone who has an interest or problem with an insurer can review the reports and see what the department’s position is on any of the issues referenced above. I have used these Market Conduct Examination Reports to address issues with numerous insurers when attempting to assist a shop owner having an issue with an insurer or to assist the shop’s customer directly as a designated representative, so let’s take a look and see how DOBI is addressing or resolving some of the current issues.
11:3-10.10 Examinations by the New Jersey Department of Banking and Insurance
To ensure compliance with this rule, DOBI personnel will investigate the market performance of insurers.
To enable department personnel to reconstruct an insurer’s activities pursuant to the provisions of this rule, each insurer must maintain a complete file on each claim settled pursuant to this rule. The claim file shall contain all communications, transactions, notes and work papers relating to the claim. With respect to automobile damage claims, the file also shall include the name, address, telephone number and license number of any auto body repair facility that has been utilized by the insurer in the adjustment of the loss or repair of the automobile. All papers in the file must be accurately dated by the insurer.
Wait a minute – something is not right here! I went to NJ DOBI’s website to review some of the Market Conduct Examination Reports to review the department’s position on some of the things going on presently, and guess what?
The current Market Conduct Examination Reports are not there.
In fact, there are no Market Conduct Examination Reports from 2018 forward. I was amazed to learn about the absence of these reports because this is such an important issue – the relationship between an insurer and the collision shop chosen to repair a damaged vehicle.
Now, since insurers have been acting so crazy lately, it is beginning to all make sense. It appears that NJ DOBI is looking the other way while insurers are abusing their insureds, and no one will know the difference because there are no reports to review and produce to argue one’s point. I hope I am wrong about this matter, but you can bet on one thing. I am going to find out what is going on, and I will report back in my next article to let the entire industry know.
Stay tuned, and if anyone already knows what is going on with the Market Conduct Examination Reports, please call me on the AASP/NJ Hotline at (732) 922-8909 and let me know. In the meantime, stay tuned for more reports on this issue.
Want more? Check out the October 2024 issue of New Jersey Automotive!