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Bill

A 3802

Relates to enacting the certificate of insurance reliability act (CIRA)

2025 Regular Session Introduced by David Weprin

NJ A3802 redefines legal insurance, excluding fixed-payment prepaid plans from insurance regulation and shifting oversight to limited-lines licensing and DOBI form/rate rules.

REFERRED TO INSURANCE
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Bill Summary · A 3802

Summary — A3802 (Certificate of Insurance Reliability Act / legal service plans)

Status: Introduced Feb 22, 2024; passed both houses (Assembly 79–1–0; Senate 39–0) June 30, 2025; conditional veto and governor recommendations returned Nov 24, 2025; referred to Insurance Committee (most recent referral 2025-01-30). Amends: P.L.1981, c.160 (C.17:46C-1 et seq.), the "New Jersey Legal Services Insurance Act."

Purpose

A3802 modernizes New Jersey’s legal-insurance rules by distinguishing certain prepaid legal service plans from traditional insurance. The bill clarifies the statutory definition of “legal insurance” and excludes specified prepaid arrangements from that definition so those arrangements are not regulated as insurance by the Department of Banking and Insurance (DOBI).

Key provisions and changes

  • Revises the statutory definition of “legal insurance” to emphasize the contractual assumption of an obligation to provide, pay, or reimburse for specified legal services or legal expenses in exchange for periodic payment.
  • Excludes from the definition of “legal insurance” certain arrangements, notably:
    • Prepaid plans under which members prepay for specific legal services provided through an organization that contracts directly with attorneys, where the organization pays attorneys fixed, pre‑arranged payments and attorneys receive no additional payment or reimbursement for those services.
    • Existing enumerated exclusions (retainer contracts, small consultation/referral plans, employer/educational informal plans, union/employee association services, ERISA-regulated employee benefit plans, legal aid/public defender/military/approved nonprofit programs).
  • Senate floor amendments (adopted Feb 25, 2025) clarified the “legal insurance” definition and the specific exclusion for fixed‑payment prepaid arrangements.
  • Governor’s conditional veto (Nov 24, 2025) recommended changes to preserve consumer protections while reducing regulatory burden:
    • Treat a “prepaid legal insurance plan” as legal insurance subject to the Act, except the bill would permit entities that issue such plans to have employees or authorized representatives sell them without each individual holding a full producer license.
    • Require the issuing entity (or a designated representative) to obtain a limited‑lines prepaid legal insurance producer license, to supervise sellers, to develop and deliver training to employees/representatives, to pay applicable fees, and to comply with licensing/renewal rules (biennial renewal).
    • Maintain DOBI oversight over forms, rates, and consumer protections while modernizing licensing for sellers.

Who is affected

  • Consumers who buy prepaid legal service plans: changes affect whether those products are regulated as insurance and what consumer protections (form/rate approval, solvency oversight) apply.
  • Organizations that offer prepaid legal plans and the attorneys they contract with: may be exempted from DOBI insurance regulation under the bill’s exclusions (subject to governor’s recommended licensing/supervision conditions).
  • Insurance producers/agents and DOBI: alters licensing requirements and reduces (or modifies) DOBI’s regulatory reach over some legal service products.
  • Bar/Judiciary: proponents have argued attorney regulation provides oversight; the bill shifts the regulatory balance between DOBI and other oversight mechanisms.

Legislative history & timeline

  • Introduced: Feb 22, 2024.
  • Favorable reports: Assembly Financial Institutions & Insurance Committee (May 20, 2024); Assembly Judiciary Committee (Sept 19, 2024); Senate Commerce Committee (Dec 12, 2024).
  • Passed Assembly and Senate June 30, 2025 (substituted for S3061 (1R)).
  • Conditional veto from the Governor received by the Legislature Nov 13, 2025; Governor returned the bill Nov 24, 2025 with recommendations to amend to retain consumer protections while modernizing producer licensing.
  • Effective date (as in introduced text): 90 days after enactment (subject to final enacted language).

Potential impacts / considerations

  • Deregulation proponents: bill reduces regulatory burden on innovative prepaid legal plans, could expand market access and product variety.
  • Consumer protection concerns: removing DOBI oversight could reduce form/rate approval, solvency requirements, and agent licensing safeguards. The governor’s recommended amendments aim to mitigate these risks by creating a limited‑lines licensing and supervision framework while preserving certain aspects of DOBI oversight.
  • Regulatory balance: the bill shifts oversight questions between DOBI and legal discipline/bars; final language will determine the extent of deregulation versus retained safeguards.

Sponsors/related: Primary sponsors include A. Verlina Reynolds-Jackson, B. Wimberly, R. Freiman; companion/related bills include S3061 and S6569.

Compiled from official sources — confirm details with the bill’s official record.

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