17:46C-6. Policy or master policy; certificate of coverage; forms; rating system; approval; hearings

a. (1) Each contractual obligation for legal insurance shall be evidenced by a policy or master policy. Legal insurance may be written on an individual basis or on a group or blanket basis in accordance with the provisions of chapter 27 of Title 17B of the New Jersey Statutes. Each person insured under a group policy shall be issued a certificate of coverage. No legal insurance policy or certificate of any kind may be issued or delivered in this State unless and until a copy of the form thereof has been approved by the commissioner.

(2) The forms shall meet the following requirements:

(a) Policies shall contain a detailed list and description of the legal services promised or the legal matters for which expenses are to be reimbursed and the amount or method of reimbursement;

(b) Policies and certificates shall indicate prominently the name of the insurer and the full address of its principal place of business;

(c) Certificates issued under group policies may summarize the terms of the master contract but shall contain a full and clear statement of the benefits provided; and

(d) Such other requirements as the commissioner shall determine.

(3) The commissioner shall disapprove a form if it is found that it:

(a) Does not meet the requirements of subsection a. (2) of this section;

(b) Is unfair, unfairly discriminatory, misleading, obscure or encourages misrepresentation or misunderstanding of the contract, including cases where the form:

(i) Provides coverage or benefits that are too restricted to achieve the purposes for which the policy is designed;

(ii) Fails to attain a reasonable degree of readability, simplicity and conciseness; or

(iii) Is misleading, deceptive or obscure because of its physical aspects such as format, typography, style, color, material or organization;

(c) Provides coverage or benefits or contains other provisions that would endanger the solvency of the insurer;

(d) Is contrary to law; or

(e) Provides coverage or benefits for legal services rendered in connection with defending criminal charges in which the victim of the crime or a member of his immediate family or any corporation or partnership in which the victim has a substantial interest contributed to the plan on behalf of the insured.

b. (1) Every person shall, before using or applying any rate to legal insurance, file with the commissioner for approval a copy of the rating system upon which such rate is based, or by which such rate is fixed or determined. From and after the date of the approval of its rating system, every insurer shall charge and receive rates fixed or determined in strict conformity therewith. The commissioner may permit an insurer to file and use a rate for a 3-year period before approving or disapproving the rate so that appropriate expense and claims experience can be obtained through a statistical plan for use in his determination of the rate.

(2) The rates produced from such rating system shall meet the following requirements:

(a) They shall be established and justified in accordance with generally accepted insurance principles including but not limited to the experience or judgment of the insurer making the rate filing or actuarial computations; and

(b) They shall not be excessive, inadequate or unfairly discriminatory. Rates shall not be deemed unfairly discriminatory because they are averaged broadly among persons insured under group or blanket policies.

(3) The commissioner may, by written order, suspend or modify the requirement for filing and approval for any risk, group or class of risk the rates for which cannot practically be filed before they are used.

c. If the commissioner disapproves a filing he shall notify the person making it in writing specifying therein the reasons for disapproval. A hearing shall be granted after a request in writing by any such person aggrieved by the disapproval. The commissioner may, after notice and hearing, disapprove any rating system that has been previously approved; provided that such disapproval shall apply only to rating systems used on and after the date of said disapproval.

d. The commissioner may require the submission of whatever relevant information is reasonably necessary in determining whether to approve or disapprove a filing made pursuant to subsection a. or b. of this section.

L.1981, c. 160, s. 6.