USA – NEW JERSEY Trends and Developments Contributed by: Jeffrey M. Pollock, Pollock Law, LLC
argument that the Act merely restates the common- law standard, holding instead that it creates a distinct statutory cause of action, incorporates violations of the Unfair Claims Settlement Practices Act, and does not import the “fairly debatable” test the Legislature plainly knew about when it legislated. On the ele- ments, that is a real policyholder win. The procedural half of Tenenbaum recovers the advan- tage. The court holds that statutory claims remain sub- ject to the established practice of severance and stay pending resolution of the underlying UM or UIM claim, because deferring costly discovery promotes judicial economy. A treble-damages remedy counsel can- not investigate until the underlying claim concludes carries materially less weight in settlement than the statute’s text implies. Earlier, the federal court holds in Roach v Allstate Insurance Co (D.N.J., 8 December 2023) that the Act does not reach conduct predating its effective date. Two unsettled questions now drive Fair Conduct Act practice. The first asks whether courts can extend the Act beyond UM and UIM claims into other first-party lines; the statutory text confines it, and any expansion belongs to the legislature. The second asks whether the Supreme Court will endorse Tenenbaum ’ s separa- tion of the statutory standard from the common law or reabsorb the Act into the Pickett v Lloyd ’ s framework. Counsel should treat the favourable half of Tenenbaum as provisional until that happens. The common-law standard the Act supplements remains demanding. Under Pickett v Lloyd ’ s , an insured must show that the insurer had no fairly debat - able reason to deny or delay, and a genuine coverage dispute defeats the claim. Insurer-side commentary describing New Jersey’s bad faith threshold as a high bar states the current authorities accurately rather than aspirationally. Read the Fair Conduct Act in that context: a targeted fix for one line of business that leaves the general standard untouched. The regulatory layer Legislative and regulatory activity moves faster than the case law, and clients feel it sooner. New Jersey raises compulsory automobile limits in stages under P.L. 2022, c. 87, to USD25,000/50,000/25,000 for
policies issued or renewed from 1 January 2023, and to USD35,000/70,000/25,000 from 1 January 2026. The Department of Banking and Insurance separately raises minimum limits for heavy commercial motor vehicles and autocabs to a USD1.5 million combined single limit, effective 1 July 2024. Higher compulsory primary limits compress the layer in which UIM disputes arise, which should shrink the pool of claims the Fair Conduct Act polices. Higher commercial motor limits raise the stakes in trucking and livery disputes. Underwriting inputs remain the most politically exposed question in the state. Senate Bill 2248 would bar insurers from setting automobile rates by refer- ence to credit history, education, occupation, marital status and postcode. It has passed the Senate in ear- lier sessions, has never moved in the Assembly, and drew a further committee hearing in June 2026. Treat it as a live risk to insurer pricing models rather than an imminent change in the law. Disclosure obligations have already moved. Under P.L. 2021, c. 98, authorised insurers must give commer- cial policyholders a Department-issued summary of common business interruption clauses, triggers and exclusions. That summary expressly does not alter the coverage the policy affords, which limits its use in an estoppel or reasonable expectations argument. Its likelier value is evidential, as a benchmark against which to measure an insurer’s own pre-sale commu- nications. Solvency regulation drives the sharpest current fight. In December 2025, the Department adopted amend- ments extending the Insurance Holding Company Act to reciprocal exchanges and requiring reciprocals to set attorney-in-fact fees on an arm’s length, fair and reasonable basis under SSAP No 25. Citizens United Reciprocal Exchange challenged the rules and won a stay from the Appellate Division in March 2026, which the Supreme Court vacated on 10 April 2026. The rules govern while the challenge proceeds, and the result will determine how far New Jersey can regulate the fee structures of reciprocals writing personal lines here.
339 I NSURANCE L I T IGATI O N 2026
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