The National Association of Subrogation Professionals (NASP) reported the following information below. WWR has long been a member of NASP.
NASP Opposes New Jersey Senate Bill 191/Assembly Bill 793
An anti-subrogation bill recently swept through New Jersey’s Assembly and Senate, receiving the requisite number of votes. The bill was presented to the Governor for his signature. Governor Christie did not sign the bill. However, the bill became law after forty-five (45) days of “no action” being taken.
The New Jersey law amends “Statute 39:6A-9.1 Recovery from Tortfeasor,” by adding the following language:
Any recovery by an insurer, health maintenance organization or governmental agency pursuant to this subsection shall be subject to any claim against the insured tortfeasor’s insurer by the injured party and shall be paid only after satisfaction of that claim, up to the limits of the insured tortfeasor’s motor vehicle or other liability insurance policy.
Two main issues are apparent in the bill. First, the amended language appears to give priority to the personal injury victim before the medical benefits provider, whether they are an insurer, HMO or governmental agency. Second, the amendment limits the responsibility of the tortfeasor up to the limits of his/her liability policy.
As we have seen repeatedly, the law lacks clarity and precision. First and foremost the “made whole” or priority language is confusing. The subrogation provider shall only be paid after the injured party’s claim is “satisfied.” This standard is subjective as opposed to objective. It is anticipated there will be many questions as to when an injured party is “satisfied.” Additionally, the law limits the responsible party’s payment to the limits of their liability policy. The result is to discourage one from purchasing large limits or even sufficient limits of liability coverage.
NASP wrote a letter to the Governor of New Jersey in opposition to this bill. The Governor’s Office contacted NASP to gain information on subrogation and the effects of this bill. Although NASP was able to provide beneficial information regarding subrogation and the public policy reasons that favor allowing subrogation, the bill had the momentum to become new law.