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S3333
SENATE, No. 3333
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 5, 2026
Sponsored by:
Senator� SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
���� Requires certain public contracts for insurance
coverage and consulting services to be awarded through competitive contracting
process.�
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
requiring competitive contracting for certain insurance
public contracts and supplementing N.J.S.18A:18A-1 et seq. and P.L.1999, c.440
(C.40A:11-4.1 et al.).
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� �1.�� a.� A board of education
seeking to procure any insurance products or insurance consultant services
shall use the competitive contracting process set forth in sections 45 through
49 of P.L.1999, c.440 (C.18A:18A-4.1 et seq.) and shall comply with the
additional requirements of this section.
���� �b.�� An insurance consultant providing
any insurance consultant services to a board of education shall be compensated
directly and exclusively by the board of education at a fixed amount, an hourly
rate, or on another common and readily comparable basis, provided that the compensation
shall not be determined as a percentage of any insurance product costs.� No
insurer shall pay an insurance consultant any commission or other form of
compensation for any insurance consultant services provided in connection with
any contract awarded to an insurer by a board of education.
���� �c.��� (1)� (a)� An insurance
consultant seeking a contract for the provision of any insurance consultant
services to a board of education shall, in the competitive contracting
proposal, certify that no commission or other form of compensation will be
accepted from an insurer for any insurance consultant services provided in
connection with any contract awarded to the insurer by the board of education.
���� (b)�� An insurance consultant
awarded a contract for the provision of any insurance consultant services to a
board of education shall, as soon as practicable after being awarded a
contract, but no later than the date on which an insurer is recommended to the board
of education, disclose in a statement to the board of education the aggregate
amount of commissions or other forms of compensation received in each of the
preceding three years from each insurer that submits a proposal.
���� (c)�� An insurance consultant
awarded a contract for the provision of any insurance consultant services to a
board of education shall, no later than the last business day of each year of
the contract, certify to the board of education that no commission or other
form of compensation has been accepted from an insurer for any insurance
consultant services provided in connection with any contract awarded to the
insurer by the board of education.
���� (2)�� (a)� An insurer seeking
a contract for the provision of any insurance products to a board of education
shall, in the competitive contracting proposal, certify that no commission or
other form of compensation shall be paid to an insurance consultant for any
insurance consultant services provided in connection with any contract awarded
to the insurer by the board of education.
���� (b)�� An insurer awarded a
contract for the provision of any insurance products to a board of education
shall, no later than the last business day of each year of the contract,
certify to the board of education that no commission or other form of
compensation has been paid to the insurance consultant for any insurance
consultant services provided in connection with any contract awarded to the
insurer by the board of education.
���� �d.�� Upon a violation of any
provision of subsections b. or c. of this section by an insurance consultant or
insurer, the board of education shall be entitled to terminate any contract
with the insurance consultant or insurer and to recover in a civil action the
amount of any commission or other form of compensation paid in violation of subsection
b. of this section.
���� �e.��� (1) The request for
proposal documentation shall include: the compensation restrictions set forth
in subsection b. of this section; the manner of compensation; the certification
and disclosure requirements set forth in subsection c. of this section; the
penalties for violations set forth in subsection d. of this section; the terms,
coverages, and costs of current insurance products or insurance consultant
services; the loss experience; and the anticipated insurance product or
insurance consultant service needs.
���� (2)�� The request for proposal
documentation shall be made available to proposers in electronic format.
���� �f.��� (1)� The notice of the
availability of request for proposal documentation shall be published in an official
newspaper of the board of education, a newspaper of general circulation in at
least five counties of this State, and on the board of education�s Internet
website at least 60, but no more than 120, days prior to the date anticipated
for the commencement of the contract.
���� (2)�� The request for proposal
documentation shall be submitted to at least one joint insurance fund,
established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), at the same time
the notice of the availability of the documentation is published to determine
if it would be advantageous for the board of education to become a member of
the joint insurance fund.
���� (3)�� Each interested insurer
or insurance consultant shall submit a proposal to the board of education at
least 30 days prior to the date anticipated for the commencement of the
contract.
���� (4)�� The purchasing agent or
counsel or school business administrator shall obtain at least three proposals.
���� (5)�� The report prepared by
the purchasing agent or counsel or school business administrator evaluating and
recommending the award of a contract or contracts shall include an analysis and
discussion of the availability, terms, and price of comparable coverage through
participation in at least one joint insurance fund and, with respect to health
insurance, the School Employees� Health Benefits Program.
���� �g.�� As used in this section:
���� �Insurance� means any lines of
insurance in subtitle 3 of Title 17 of the Revised Statutes or subtitle 3 of
Title 17B of the New Jersey Statutes that are commonly available in a
competitive market, including but not limited to life, health, annuities,
indemnity, property and casualty, fidelity, surety, guaranty, and title
insurance.
���� �Insurance consultant� means an
individual or a business entity providing, for a commission, brokerage fee, or
other consideration, services, including but not limited to brokerage, risk
management, and related administrative services associated with the
procurement, evaluation, and advice, counsel, or opinion with respect to the benefits,
advantages, or disadvantages of any insurance product or contract that is or could
be issued to a board of education.
���� �Insurer� means a business
entity authorized to transact the business of insurance in this State pursuant
to subtitle 3 of Title 17 of the Revised Statutes or subtitle 3 of Title 17B of
the New Jersey Statutes.
���� �Other forms of compensation�
includes but is not limited to incentive payments, bonuses, rebates, or any
other thing of value.
���� �2.�� a.� A contracting unit seeking
to procure any insurance products or insurance consultant services shall use
the competitive contracting process set forth in sections 1 through 5 of P.L.1999,
c.440 (C.40A:11-4.1 et seq.) and shall comply with the additional requirements
of this section.
���� �b.�� An insurance consultant providing
any insurance consultant services to a contracting unit shall be compensated
directly and exclusively by the contracting unit at a fixed amount, an hourly
rate, or on another common and readily comparable basis, provided that the compensation
shall not be determined as a percentage of any insurance product costs.� No
insurer shall pay an insurance consultant any commission or other form of
compensation for any insurance consultant services provided in connection with
any contract awarded to an insurer by a contracting unit.
���� �c.��� (1)� (a)� An insurance
consultant seeking a contract for the provision of any insurance consultant
services to a contracting unit shall, in the competitive contracting proposal,
certify that no commission or other form of compensation will be accepted from
an insurer for any insurance consultant services provided in connection with any
contract awarded to the insurer by the contracting unit.
���� (b)�� An insurance consultant
awarded a contract for the provision of any insurance consultant services to a
contracting unit shall, as soon as practicable after being awarded a contract,
but no later than the date on which an insurer is recommended to the contracting
unit, disclose in a statement to the contracting unit the aggregate amount of
commissions or other forms of compensation received in each of the preceding
three years from each insurer that submits a proposal.
���� (c)�� An insurance consultant
awarded a contract for the provision of any insurance consultant services to a
contracting unit shall, no later than the last business day of each year of the
contract, certify to the contracting unit that no commission or other form of
compensation has been accepted from an insurer for any insurance consultant
services provided in connection with any contract awarded to the insurer by the
contracting unit.
���� (2)�� (a)� An insurer seeking
a contract for the provision of any insurance products to a contracting unit
shall, in the competitive contracting proposal, certify that no commission or
other form of compensation shall be paid to an insurance consultant for any
insurance consultant services provided in connection with any contract awarded
to the insurer by the contracting unit.
���� (b)�� An insurer awarded a
contract for the provision of any insurance products to a contracting unit
shall, no later than the last business day of each year of the contract,
certify to the contracting unit that no commission or other form of
compensation has been paid to the insurance consultant for any insurance
consultant services provided in connection with any contract awarded to the
insurer by the contracting unit.
���� �d.�� Upon a violation of any
provision of subsections b. or c. of this section by an insurance consultant or
insurer, the contracting unit shall be entitled to terminate any contract with
the insurance consultant or insurer and to recover in a civil action the amount
of any commission or other form of compensation paid in violation of subsection
b. of this section.
���� �e.��� (1)� The request for
proposal documentation shall include: the compensation restrictions set forth
in subsection b. of this section; the manner of compensation; the certification
and disclosure requirements set forth in subsection c. of this section; the
penalties for violations set forth in subsection d. of this section; the terms,
coverages, and costs of current insurance products or insurance consultant
services; the loss experience; and the anticipated insurance product or
insurance consultant service needs.
���� (2)�� The request for proposal
documentation shall be made available to proposers in electronic format.
���� �f.��� (1)� The notice of the
availability of request for proposal documentation shall be published in an official
newspaper of the contracting unit, a newspaper of general circulation in at
least five counties of this State, and on the contracting unit�s Internet
website at least 60, but no more than 120, days prior to the date anticipated
for the commencement of the contract.
���� (2)�� The request for proposal
documentation shall be submitted to at least one joint insurance fund,
established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), at the same time
the notice of the availability of the documentation is published to determine
if it would be advantageous for the contracting unit to become a member of the
joint insurance fund.
���� (3)�� Each interested insurer
or insurance consultant shall submit a proposal to the contracting unit at
least 30 days prior to the date anticipated for the commencement of the
contract.
���� (4)�� The purchasing agent or
counsel or administrator shall obtain at least three proposals.
���� (5)�� The report prepared by
the purchasing agent or counsel or administrator evaluating and recommending
the award of a contract or contracts shall include an analysis and discussion
of the availability, terms, and price of comparable coverage through
participation in at least one joint insurance fund and, with respect to health
insurance, the State Health Benefits Program.
���� �g.�� As used in this section:
���� �Insurance� means any lines of
insurance in subtitle 3 of Title 17 of the Revised Statutes or subtitle 3 of
Title 17B of the New Jersey Statutes that are commonly available in a
competitive market, including but not limited to life, health, annuities,
indemnity, property and casualty, fidelity, surety, guaranty, and title
insurance.
���� �Insurance consultant� means an
individual or a business entity providing, for a commission, brokerage fee, or
other consideration, services, including but not limited to brokerage, risk
management, and related administrative services associated with the
procurement, evaluation, and advice, counsel, or opinion with respect to the benefits,
advantages, or disadvantages of any insurance product or contract that is or could
be issued to a contracting unit.
���� �Insurer� means a business
entity authorized to transact the business of insurance in this State pursuant
to subtitle 3 of Title 17 of the Revised Statutes or subtitle 3 of Title 17B of
the New Jersey Statutes.
���� �Other forms of compensation�
includes but is not limited to incentive payments, bonuses, rebates, or any
other thing of value.
���� 3.��� This act shall take
effect immediately and apply to contracts involving insurance commonly
available in a competitive market to be awarded on or after the first day of
the fourth month next following the date of enactment.
STATEMENT
���� This bill would require counties
and municipalities, and their agencies and authorities, and boards of education
to use the established competitive contracting process, and to follow new
supplemental requirements, for procuring any insurance products and insurance
consulting services.� Under current law, such contracts are exempt from public
bidding requirements.
���� Specifically, the bill would require
boards of education and local contracting units seeking to procure any
insurance products and insurance consulting services to do so by the award of a
contract through the competitive contracting process set forth in sections 45
through 49 of P.L.1999, c.440 (C.18A:18A-4.1 et seq.) and sections 1 through 5
of P.L.1999, c.440 (C.40A:11-4.1 et seq.), as applicable.
���� This bill would supplement
these provisions with respect to insurance product and insurance consulting
service contracts as follows:
���� First, an insurance consultant
providing any insurance consultant services to a board of education or local
contracting unit would be required to be compensated directly and exclusively
by the board of education or local contracting unit at a fixed amount, an
hourly rate, or on another common and readily comparable basis, provided that
the compensation shall not be determined as a percentage of any insurance
product costs, and would not be permitted to accept any commission or other
form of compensation from an insurer for any insurance consultant services
provided to the board of education or local contracting unit.� Compensating
insurance consultants in this manner is intended to help ensure that their
interests are solely aligned with those of the board of education or local
contracting unit.
���� Second, insurance consultants
and insurers would both be subject to several certification and disclosure
requirements related to the restrictions on insurance consultant compensation.
���� Third, the request for
proposal documentation would be required to include additional items including
the terms of compensation; the certification and disclosure requirements; the
penalties for violations; and certain details with respect to current insurance
use and anticipated insurance needs.
���� Fourth, the competitive
contracting proposal solicitation process would be supplemented in several
respects. �The notice of the availability of request for proposal documentation
would be required to be published through more outlets and in a new timeframe,
at least 60, but no more than 120, days prior to the date anticipated for the
commencement of the contract.� The request for proposal documentation would
also have to be submitted to at least one joint insurance fund, established
pursuant to N.J.S.40A:10-36 et seq., and with respect to health insurance, to
the State Health Benefits Plan, at the same time it is published.� Each
interested insurer or insurance consultant would be required to submit a
proposal at least 30 days prior to the date anticipated for the commencement of
the contract.� At least three proposals would be required to be obtained.� The
report evaluating and recommending the award of a contract or contracts would
be required to include an analysis and discussion of the availability, terms,
and price of comparable coverage from at least one joint insurance fund and,
with respect to health insurance, the State Health Benefits Plan, ensuring that
alternative insurance products available to the board of education or
contracting unit, which may be more cost-effective options, are considered.
���� Finally, this bill would
subject insurers and insurance consultants to civil liability for violations of
its provisions.
���� Insurance is one of the major
expenses of boards of education and local contracting units.� Requiring boards
of education and local contracting units to use an open, transparent, and
competitive process for the award of insurance contracts would help ensure that
the lowest possible cost is realized and help protect against waste, abuse, and
insider deals, ultimately saving taxpayer money.�