A recent New Jersey Supreme Court ruling finds that insurance brokers, producers, and agents are subject to the state’s Consumer Fraud Act (CFA) and can’t avoid liability by claiming they are exempt “semi-professionals.”
The July 15 unanimous ruling in Lowe v. Audet, while in the context of medical disability benefits, could pose broader implications in state insurance claims practices.
According to a court clerk syllabus of the case, the appeal addresses whether insurance brokers, producers, and agents are exempt from the CFA as “semi-professionals” under the “learned professional” exception. It states that Dr. James Lowe is a neurosurgeon who co-owned a medical practice and several unrelated businesses.
Lowe purchased disability insurance from defendants Bernard Audet and Richard Laver, who are insurance brokers and producers employed by the Creative Financial Group, Ltd., between 2003 and 2016. He was reportedly advised that he would receive maximum benefits if he were ever to become disabled.
“Defendants never disclosed other business interests could affect benefits,” states a LexisNexis summary of the Supreme Court ruling. “Lowe was diagnosed with bilateral maculopathies preventing neurosurgery in 2021. Insurance companies paid only partial benefits due to Lowe’s other businesses.”
The syllabus adds that Lowe’s vision condition prevented him from performing neurosurgery, and because of this, he made claims for maximum benefits under his insurance policies.
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