Broadens scope of information sharing and civil immunity therefor, related to insurance fraud.

A3255 1R

[First Reprint]

ASSEMBLY, No. 3255

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman DAN HUTCHISON

District 4 (Atlantic, Camden and Gloucester)

SYNOPSIS

���� Broadens scope of information sharing and civil
immunity therefor, related to insurance fraud.

CURRENT VERSION OF TEXT

���� As reported by the Assembly Public Safety and
Preparedness Committee on March 19, 2026, with amendments.

��

An Act

concerning insurance fraud, amending P.L.1985,
c.179, and amending and supplementing P.L.1983, c.320.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 2 of P.L.1985,
c.179 (C.17:23A-2) is amended to read as follows:

���� 2.���
[
Definitions.
]
��� As used in

[
this
act
]

P.L.1985,
c.179 (C.17:23A-1 et seq.)
:

���� a.���� "Adverse
underwriting decision" means:

���� (1)�� Any of the following
actions with respect to insurance transactions involving insurance coverage
which is individually underwritten for an individual:

���� (a)�� A declination of
insurance coverage,

���� (b)�� A termination of
insurance coverage,

���� (c)�� Failure of an agent to
apply for insurance coverage with a specific insurance institution which the
agent represents and which is requested by an applicant,

���� (d)�� In the case of a
property or casualty insurance coverage:

���� (i)��� Placement by an
insurance institution or agent of a risk with a residual market mechanism or an
unauthorized insurer, or

���� (ii)�� The charging of a
higher rate on the basis of information which differs from that which the
applicant or policyholder furnished,

���� (e)�� In the case of a life,
health or disability insurance coverage, an offer to insure at a higher rate
than the insurance institution's table of premium rates applicable to the age
and class of risk of each person to be covered under that coverage and to the
type and amount of insurance provided.

���� (2)�� Notwithstanding
paragraph (1) above, the following actions, if permitted by law, shall not be
considered adverse underwriting decisions but the insurance institution or
agent responsible for their occurrence shall nevertheless provide the applicant
or policyholder with the specific reason or reasons for their occurrence:

���� (a)�� The termination of an
individual policy form on a class or Statewide basis,

���� (b)�� A declination of
insurance coverage solely because such coverage is not available on a class or
Statewide basis, or

���� (c)�� The rescission of a
policy.

���� b.��� "Affiliate" or
"affiliated" means a person that directly, or indirectly through one
or more intermediaries, controls, is controlled by or is under common control
with another person.

���� c.���� "Agent" means
any person defined in chapter 22 of Title 17 of the Revised Statutes
[
, chapter 22
of Title 17B of the New Jersey Statutes
]

and in R.S.17:35-23.
�Agent� includes an insurance producer as defined in
section 3 of P.L.2001, c.210 (C.17:22A-28).

���� d.��� "Applicant"
means a person who seeks to contract for insurance coverage other than a person
seeking group insurance that is not individually underwritten.

���� e.���� "Commissioner"
means the Commissioner of
Banking and
Insurance.

���� f.���� "Consumer
report" means any written, oral or other communication of information
bearing on a natural person's creditworthiness, credit standing, credit
capacity, character, general reputation, personal characteristics or mode of
living which is used or expected to be used in connection with an insurance
transaction.

���� g.��� "Consumer reporting
agency" means any person who:

���� (1)�� Regularly engages, in
whole or in part, in the practice of assembling or preparing consumer reports,
for a monetary fee,
[
and
]

���� (2)�� Obtains information
primarily from sources other than insurance institutions, and

���� (3)�� Furnishes consumer
reports to other persons.

���� h.��� "Control,"
including the terms "controlled by" or "under common control
with," means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether through
the ownership of voting securities, by contract other than a commercial
contract of goods or nonmanagement services, or otherwise, unless the power is
the result of an official position with or corporate office held by the person.

���� i.���� "Declination of
insurance coverage" means a denial, in whole or in part, by an insurance
institution or agent of requested insurance coverage.

���� j.���� "Individual"
means any natural person who:

���� (1)�� In the case of property
or casualty insurance, is a past, present or proposed named insured or
certificate holder;

���� (2)�� In the case of life,
health or disability insurance, is a past, present or proposed principal
insured or certificate holder;

���� (3)�� Is a past, present or
proposed policy owner;

���� (4)�� Is a past or present
applicant;
[
or
]

���� (5)�� Is a past or present
claimant; or

���� (6)�� Derived, derives or is
proposed to derive insurance coverage under an insurance policy or certificate
subject to
[
this
act
]

P.L.1985,
c.179 (C.17:23A-1 et seq.)
.

���� k.��� "Institutional
source" means any person or governmental entity that provides information
about an individual to an agent, insurance institution or insurance support
organization, other than:

���� (1)�� An agent,

���� (2)�� The individual who is
the subject of the information, or

���� (3)�� A natural person acting
in a personal capacity rather than in a business or professional capacity.

���� l.���� "Insurance
institution" means any corporation, association, partnership, reciprocal
exchange, interinsurer, Lloyd's insurer, fraternal benefit society or other
person engaged in the business of insurance, including health maintenance
organizations, medical service corporations, hospital service corporations,
health
service corporations,
dental service corporations,
dental plan
organizations

and
automobile insurance plans
[
and the New
Jersey Automobile Full Insurance Underwriting Association
]
, as defined
in section 2 of P.L.1973, c.337 (C.26:2J-2), section 1 of P.L.1940, c.74
(C.17:48A-1), section 1 of P.L.1960, c.1 (C.17:48B-1
), �section 1 of
P.L.1938, c.366 (C.17:48-1), section 1 of P.L.1985, c.236 (C.17:48E-1),
section
2 of P.L.1968, c.305 (C.17:48C-2),
section 2 of P.L.1979, c.478
(C.17:48D-2), and
P.L.1970, c.215 (C.17:29D-1 et seq.)
[
and P.L.1983,
c.65 (C.17:29A-33 et al.)
]
,
respectively. "Insurance institution" shall not include agents or
insurance-support organizations.

���� m.�� "Insurance-support
organization" means:

���� (1)�� Any person who regularly
engages, in whole or in part, in the practice of assembling or collecting
information about
[
natural
]
persons for
the primary purpose of providing the information to an insurance institution or
agent for insurance transactions, including:

���� (a)�� The furnishing of
consumer reports or investigative consumer reports to an insurance institution
or agent for use in connection with an insurance transaction, or

���� (b)�� The collection of
[
personal
]
information
from insurance institutions, agents or other insurance-support organizations
for the purpose of detecting or preventing fraud, material misrepresentation or
material nondisclosure in connection with insurance underwriting or insurance
claim activity.

���� (2)�� Notwithstanding
paragraph (1) of this subsection, the following persons shall not be considered
"insurance-support organizations" for the purposes of
[
this act
]

P.L.1985,
c.179 (C.17:23A-1 et seq.)
: agents, government institutions, insurance
institutions, medical-care institutions, medical professionals and rating
organizations as defined in section 1 of P.L.1944, c.27 (C.17:29A-1).

���� n.��� "Insurance
transaction" means any transaction involving insurance primarily for
personal, family or household needs rather than business or professional needs
which entails:

���� (1)�� The determination of an
individual's eligibility for an insurance coverage, benefit or payment, or

���� (2)�� The servicing of an
insurance application, policy, contract or certificate.

���� o.��� "Investigative
consumer report" means a consumer report or portion thereof in which
information about a natural person's character, general reputation, personal
characteristics or mode of living is obtained through personal interviews with
the person's neighbors, friends, associates, acquaintances or others who may
have knowledge concerning those items of information.

���� p.��� "Medical-care
institution" means a facility or institution that is licensed to provide
health care services to natural persons, including but not limited to
hospitals, skilled nursing facilities, nursing facilities, home-health
agencies, medical clinics, rehabilitation agencies, public health agencies or
health maintenance organizations.

���� q.��� "Medical
professional" means any person providing health care services to natural
persons, including but not limited to a physician, podiatrist, dentist, nurse,
optometrist, chiropractor, physical therapist, occupational therapist,
pharmacist, psychologist, dietitian, psychiatric social worker or speech
therapist.

���� r.���� "Medical-record
information" means personal information which:

���� (1)�� Relates to an
individual's physical or mental condition, medical history or medical
treatment, and

���� (2)�� Is obtained from a
medical professional or medical-care institution, from the individual, or from
the individual's spouse, parent or legal guardian.

���� s.���� "Person"
means any natural person, corporation, association, partnership or other legal
entity.

���� t.���� "Personal
information" means any individually identifiable information gathered in
connection with an insurance transaction from which judgments can be made about
an individual's character, habits, avocations, finances, occupation, general
reputation, credit, health or any other personal characteristics.�
"Personal information" includes an individual's name and address and
medical-record information but does not include privileged information.

���� u.��� "Policyholder"
means any person who:

���� (1)�� In the case of
individual property or casualty insurance, is a present named insured;

���� (2)�� In the case of
individual life, health or disability insurance, is a present policy owner; or

���� (3)�� In the case of group
insurance which is individually underwritten, is a present group certificate
holder.

���� v.��� "Pretext
interview" means an interview whereby a person, in an attempt to obtain
information about a natural person, performs one or more of the following acts:

���� (1)�� Pretends to be someone
he is not,

���� (2)�� Pretends to represent a
person he is not in fact representing,

���� (3)�� Misrepresents the true
purpose of the interview, or

���� (4)�� Refuses to identify
himself upon request.

���� w.�� "Privileged
information" means any individually identifiable information that:

���� (1)�� Relates to a claim for
insurance benefits or a civil or criminal proceeding involving
[
an individual
]

any person
concerning an insurance transaction
, and

���� (2)�� Is collected in
connection with or in reasonable anticipation of a claim for insurance benefits
or civil or criminal proceeding involving
[
an
individual
]

any person concerning an insurance transaction
; except that information
otherwise meeting the requirements of this subsection shall nevertheless be
considered personal information under
[
this
act
]

P.L.1985,
c.179 (C.17:23A-1 et seq.)
if it is disclosed in violation of section 13 of

[
this
act
]

P.L.1985,
c.179 (C.17:23A-13)
.

���� x.��� "Residual market
mechanism" means any insurance pooling mechanism, joint underwriting
association, or reinsurance facility created pursuant to law or regulation
which provides insurance coverage for any risk that is not insurable in the
voluntary market.

���� y.��� "Termination of
insurance coverage" or "termination of an insurance policy"
means either a cancellation or nonrenewal of an insurance policy, in whole or
in part, for any reason other than the failure to pay a premium as required by
the policy.

���� z.���� "Unauthorized
insurer" means an insurance institution that has not been granted a
certificate of authority by the commissioner to transact the business of
insurance in this State.

(cf: P.L.1985, c.179, s.2)

���� 2.��� Section 13 of P.L.1985,
c.179 (C.17:23A-13) is amended to read as follows:

���� 13.�
[
Disclosure
limitations and conditions.
]
�
An insurance institution, agent or insurance-support organization shall not
disclose any personal or privileged information
[
about an individual
]
collected or
received in connection with
, or in reasonable anticipation of,
an
insurance transaction, unless the disclosure is:

���� a.���� With the written
authorization of the individual
to whom the information relates
,
provided:

���� (1)�� If the authorization is
submitted by another insurance institution, agent or insurance-support
organization, the authorization meets the requirements of section 6 of
[
this act
]

P.L.1985,
c.179 (C.17:23A-6)
, or

���� (2)�� If the authorization is
submitted by a person other than an insurance institution, agent or
insurance-support organization, the authorization is:

���� (a)�� Dated,

���� (b)�� Signed by the
individual, and

���� (c)�� Obtained one year or
less prior to the date a disclosure is sought pursuant to this subsection;

���� b.��� To a person other than
an insurance institution, agent or insurance-support organization, provided the
disclosure is reasonably necessary:

���� (1)�� To enable the person to
perform a business, professional or insurance function for the disclosing
insurance institution, agent or insurance-support organization, and the person
agrees not to disclose the information further without the individual's written
authorization unless the further disclosure:

���� (a)�� Would otherwise be
permitted by this section if made by an insurance institution, agent or
insurance-support organization, or

���� (b)�� Is reasonably necessary
for the person to perform its function for the disclosing insurance
institution, agent or insurance-support organization; or

���� (2)�� To enable the person to
provide information to the disclosing insurance institution, agent or
insurance-support organization for the purpose of:

���� (a)�� Determining an
individual's eligibility for an insurance benefit or payment, or

���� (b)�� Detecting or preventing
criminal activity, fraud, material misrepresentation or material nondisclosure
in connection with
, or in reasonable anticipation of,
an insurance
transaction;

���� c.���� To an insurance
institution, agent, insurance-support organization or self-insurer, if the
information disclosed is limited to that which is reasonably necessary:

���� (1)�� To detect or prevent
criminal activity, fraud, material misrepresentation or material nondisclosure
in connection with
, or in reasonable anticipation of,
insurance
transactions, or

���� (2)�� For either the
disclosing or receiving insurance institution, agent or insurance-support
organization to perform its functions in connection with an insurance
transaction involving the individual;

���� d.��� To a medical-care
institution or medical professional for the purpose of:

���� (1)�� Verifying insurance
coverage or benefits;

���� (2)�� Informing an individual
of a medical problem of which the individual may not be aware; or

���� (3)�� Conducting an operations
or services audit, provided only that information is disclosed as is reasonably
necessary to accomplish the foregoing purposes;
[
or
]

���� e.���� To an insurance
regulatory authority;
[
or
]

���� f.���� To a law enforcement or
other governmental authority:

���� (1)�� To protect the interests
of the insurance institution, agent or insurance-support organization in
preventing or prosecuting the perpetration of fraud upon it, or

���� (2)�� If the insurance
institution, agent or insurance-support organization reasonably believes that
illegal activities have been conducted by
[
the
individual
]

any person
;

���� g.��� Otherwise permitted or
required by law;

���� h.��� In response to a
facially valid administrative or judicial order, including a search warrant or
subpena;

���� i.���� Made for the purpose of
conducting actuarial or research studies, provided:

���� (1)�� No individual may be
identified in any actuarial or research report,

���� (2)�� Materials allowing the
individual to be identified are returned or destroyed as soon as they are no
longer needed, and

���� (3)�� The actuarial or
research organization agrees not to disclose the information unless the
disclosure would otherwise be permitted by this section if made by an insurance
institution, agent or insurance-support organization;

���� j.���� To a party or a
representative of a party to a proposed or consummated sale, transfer, merger
or consolidation of all or part of the business of the insurance institution,
agent or insurance-support organization, except that:

���� (1)�� Prior to the
consummation of the sale, transfer, merger or consolidation only such
information is disclosed as is reasonably necessary to enable the recipient to
make business decisions about the purchase, transfer, merger or consolidation,
and

���� (2)�� The recipient agrees not
to disclose the information unless the disclosure would otherwise be permitted
by this section if made by an insurance institution, agent or insurance-support
organization;

���� k.��� To a person whose only
use of such information will be in connection with the marketing of a product
or service, if:

���� (1)�� No medical-record
information, privileged information, or personal information relating to an
individual's character, personal habits, mode of living or general reputation
is disclosed, and no classification derived from that information is disclosed,

���� (2)�� The individual has been
given an opportunity to indicate that he does not want personal information
disclosed for marketing purposes and has given no indication that he does not
want the information disclosed, and

���� (3)�� The person receiving the
information agrees not to use it except in connection with the marketing of a
product or service;

���� l.���� To an affiliate whose
only use of the information will be in connection with an audit of the
insurance institution or agent or the marketing of an insurance product or
service, if the affiliate agrees not to disclose the information for any other
purpose or to unaffiliated persons;

���� m.�� By a consumer reporting
agency, if the disclosure is to a person other than an insurance institution or
agent;

���� n.��� To a group policyholder
for the purpose of reporting claims experience or conducting an audit of the
insurance institution's or agent's operations or services, if the information
disclosed is reasonably necessary for the recipient to conduct the review or
audit;

���� o.��� To a professional peer
review organization for the purpose of reviewing the services or conduct of a
medical-care institution or medical professional;

���� p.��� To a governmental
authority for the purpose of determining the individual's eligibility for
health benefits for which the governmental authority may be liable;

���� q.��� To a certificateholder
or policyholder for the purpose of providing information regarding the status
of an insurance transaction; or

���� r.���� To a lienholder,
mortgagee, assignee, lessor or other person shown on the records of an
insurance institution or agent as having a legal or beneficial interest in a
policy of insurance, provided:

���� (1)�� No medical-record
information is disclosed unless the disclosure would otherwise be permitted by
this section
[
of
this act
]
;
and

���� (2)�� The information
disclosed is limited to that reasonably necessary to permit the person to
protect its interests in the policy.

(cf: P.L.1985, c.179, s.13)

���� 3.��� Section 20 of P.L.1985,
c.179 (C.17:23A-20) is amended to read as follows:

���� 20.�
[
Individual
remedies.
]
�� a.�� If
any insurance institution, agent or insurance-support organization fails to
comply with section 8, 9 or 10 of
[
this
act
]

P.L.1985,
c.179 (C.17:23A-8, 17:23A-9 or 17:23A-10)
with respect to the rights
granted under those sections, any person whose rights are violated may apply to
the Superior Court of this State, or any other court of competent jurisdiction,
for appropriate equitable relief.

���� b.��� An insurance
institution, agent or insurance-support organization which discloses
information in violation of section 13 of
[
this
act
]

P.L.1985,
c.179 (C.17:23A-13)
shall be liable for damages sustained by the
[
individual
]

person

about whom the information relates; except that no
[
individual
]

person

shall be entitled to a monetary award which exceeds the actual damages
sustained by the
[
individual
]

person

as a result of a violation of section 13 of
[
this
act
]

P.L.1985,
c.179 (C.17:23A-13)
.

���� c.���� In any action brought
pursuant to this section, the court may award the costs of the action and
reasonable attorney's fees to the prevailing party.

���� d.��� An action under this
section shall be brought within two years from the date the alleged violation
is or should have been discovered.

���� e.���� Except as specifically
provided in this section, there shall be no remedy or recovery available to
[
individuals
]

persons
,
in law or in equity, for occurrences constituting a violation of any provision
of
[
this
act
]

P.L.1985,
c.179 (C.17:23A-1 et seq.)
.

(cf: P.L.1985, c.179, s.20)

���� 4.��� Section 21 of P.L.1985,
c.179 (C.17:23A-21) is amended to read as follows:

���� 21.�
[
Immunity.
]
�� No
civil
liability shall be imposed and no
cause of action
[
in the
]

of any

nature
[
of
defamation, invasion of privacy or negligence
]

shall arise against any person for disclosing personal or privileged
information in accordance with
[
this
act, nor shall such a cause of action arise
]

P.L.1985, c.179 (C.17:23A-1 et seq.) or
against any person for
furnishing personal or privileged information to an insurance institution,
agent or insurance-support organization; except this section shall provide no
immunity for disclosing or furnishing false information with malice or willful
intent to injure any person.

(cf: P.L.1985, c.179, s.21)

���� 5.��� Section 9 of P.L.1983,
c.320 (C.17:33A-9) is amended to read as follows:

���� 9.� a.� (1)� Any person who
1
reasonably
1

believes that a violation of
[
this
act
]

P.L.1983,
c.320 (C.17:33A-1 et seq.)

1
[
has been
]

may have
been
1

or is being made shall notify the bureau and the Office of the Insurance Fraud
Prosecutor immediately after discovery of the alleged violation of
[
this act
]

P.L.1983,
c.320 (C.17:33A-1 et seq.)
and shall send to the bureau and office, on a
form and in a manner jointly prescribed by the commissioner and the Insurance
Fraud Prosecutor, the information requested and such additional information relative
to the alleged violation as the bureau or office may require.� The bureau and
the office shall jointly review the reports and select those alleged violations
as may require further investigation by the office for possible criminal
prosecution, and those that may warrant investigation and possible civil action
or enforcement proceeding by the bureau in lieu of or in addition to criminal
prosecution.� The bureau and office may consult, as necessary, the Department
of Labor and Workforce Development to assist with the investigation of the
failure to properly classify employees in violation of any provision of State
wage, benefit and tax laws as defined in section 1 of P.L.2009, c.194
(C.34:1A-1.11) for the purpose of wrongfully obtaining the benefits or of
evading the full payment of the insurance benefits or insurance premiums.� The
Insurance Fraud Prosecutor and the assistant commissioner shall meet monthly to
ensure that reports are handled in an expedited fashion.

���� (2)�� Whenever the Bureau of
Fraud Deterrence or any employee of the bureau obtains information or evidence
of a reasonable possibility of criminal wrongdoing not previously known or
disclosed to the Office of the Insurance Fraud Prosecutor, the bureau shall immediately
refer that information or evidence to that office.� In determining whether a
referral to the office is appropriate, the bureau shall utilize appropriate
levels of internal review, which shall include but not be limited to approval
at the assistant commissioner level.� Upon referral, the bureau shall provide
the office with all documents related to the referral consistent with section
39 of P.L.1998, c.21 (C.17:33A-23).

���� b.��� No person shall be
subject to civil liability
[
for
libel, violation of privacy or otherwise
]

or to a cause of action of any nature
by virtue of the filing of reports
or furnishing of other information, in good faith and without malice, required
by this section or required by the bureau or the Office of the Insurance Fraud
Prosecutor as a result of the authority conferred upon it by law.

���� c.���� The commissioner may,
by regulation, require insurance companies licensed to do business in this
State to keep such records and other information as he deems necessary for the
effective enforcement of
[
this
act
]

P.L.1983,
c.320 (C.17:33A-1 et seq.)
.

(cf: P.L.2021, c.167, s.4)

���� 6.��� (New section) a.�������� In
addition to the civil immunity provided to a person by subsection b. of section
9 of P.L.1983, c.320 (C.17:33A-9), a person shall also be immune from any civil
liability and not subject to a cause of action of any nature for making a
report or otherwise providing information to, or receiving information from,
any of the following, when any party involved in the information sharing
1
reasonably
1

believes that a violation of the �New Jersey Insurance Fraud Prevention Act,�
P.L.1983, c.320 (C.17:33A-1 et seq.),
1
[
has been
]

may have
been
1

or is being made:

���� (1)�� the commissioner, or any
employee, agent, or representative of the commissioner, including the Bureau of
Fraud Deterrence;

���� (2)�� federal, State, or local
law enforcement, including the Office of the Insurance Fraud Prosecutor, or
other governmental authority;

���� (3)�� any person performing a
business, professional, or insurance function concerning the detection or
prevention of criminal activity, fraud, material misrepresentation, or material
nondisclosure which violates the provisions of the �New Jersey Insurance Fraud
Prevention Act,� P.L.1983, c.320 (C.17:33A-1 et seq.);

���� (4)�� the National Association
of Insurance Commissioners, or its successor organization, and its affiliates
or subsidiaries, or any agency or committee thereof; or

���� (5)�� the National Insurance
Crime Bureau, or its successor organization, and its affiliates or
subsidiaries, or any agency or committee thereof.

���� b.��� (1)� This section shall
not abrogate or modify any existing statutory or common law privilege or
immunity enjoyed by any person described in subsection a. of this section.

���� (2)�� This section shall not
provide any immunity to any person for disclosing or furnishing false
information with
1
bad
faith,
1

malice
1
,
recklessness, fraud,
1

or willful intent to injure another person.�

���� 7.��� This act shall take
effect on the first day of the fourth month next following enactment, except
that the Commissioner of Banking and Insurance may take any anticipatory
administrative action in advance thereof as shall be necessary for the
implementation of this act.