This bill amends Section 3 of P.L.1981, c.160 (C.17:46C-3) to clarify the definition of "legal insurance" and differentiate it from traditional insurance products. The new language specifies that "legal insurance" involves the obligation to pay or reimburse for specified legal services or expenses in exchange for a specified payment, regardless of whether the payment is made by the beneficiaries or a third party. It also outlines that certain arrangements, such as retainer contracts, limited consultation plans, and legal services provided by unions or nonprofit organizations, do not qualify as legal insurance under New Jersey law.

The bill aims to modernize existing law by establishing that legal service plans do not function as insurance since they do not involve the payment of claims or the assumption of risk. This distinction is intended to clarify the nature of legal service plans and ensure that they are not conflated with traditional insurance products, thereby providing a clearer regulatory framework for these services. The act will take effect 90 days after its enactment.

Statutes affected:
Introduced: 17:46C-3