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 payment, which can be made by 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 legal aid 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 provide clarity in the legal landscape regarding the nature of legal service plans and their regulation, ensuring that they are not conflated with traditional insurance products. The act will take effect 90 days after its enactment.

Statutes affected:
Introduced: 17:46C-3