Title 17B: Insurance

Section 1: Legal Paraphrase

Title 17B of the New Jersey Revised Statutes is the State's comprehensive insurance law. It regulates the licensing, organization, and financial solvency of insurance companies and producers, governs the form and content of insurance policies, and defines the rights and obligations of insurers, policyholders, and beneficiaries. Its general provisions include the insurable-interest requirement for life insurance (N.J.S.A. 17B:24-1.1), standard policy provisions for life and health coverage (N.J.S.A. 17B:25, 17B:26), and the prohibition on unfair claim settlement practices (N.J.S.A. 17B:30-13.1), all administered under the authority of the Commissioner of Banking and Insurance (N.J.S.A. 17B:21, 17B:35). Through licensing, policy-form review, market-conduct supervision, and judicial enforcement, the Title protects consumers while ensuring that insurers remain able to pay the claims they promise.

Section 2: ELI-10 Explanation

Think of insurance as a giant safety umbrella. You pay a little money every month, and if something bad happens — like a car crash or a big hospital bill — the insurance company promises to help pay. Title 17B is the rulebook for umbrella-makers. It says only honest, well-run companies with enough money saved up can sell insurance in New Jersey, and it makes them put their promises in writing so people know exactly what they are getting. It even has a fairness rule: if a company tricks someone or refuses to pay a bill it owes, that company can be punished. And for life insurance, Title 17B has a special rule: you can only insure someone you truly care about, like a parent or spouse — you are not allowed to buy a policy betting that a stranger will die.

Section 3: General Application & Case Example 1

How It Is Applied

Title 17B operates through a mix of administrative regulation and judicial interpretation. The Department of Banking and Insurance licenses insurers and producers, reviews policy forms before they are sold, monitors solvency, and investigates unfair claim settlement practices under N.J.S.A. 17B:30-13.1, which can result in fines, license suspension, or other enforcement. In the courts, Title 17B supplies the substantive law for disputes over coverage, policy cancellation, and claims handling, with the insurable-interest requirement of N.J.S.A. 17B:24-1.1 playing a central role in life-insurance litigation. Courts also read insurance policies in light of the statute's consumer-protection purpose, applying doctrines such as the reasonable expectations of the insured to prevent insurers from using fine print to defeat coverage. The Title therefore governs both the business side of insurance — who may sell, and on what terms — and the enforcement side, protecting individuals, families, and businesses that buy coverage.

Case Example

• Case Name & Citation: Sun Life Assurance Co. of Canada v. Wells Fargo Bank, N.A., 238 N.J. 157, 208 A.3d 839 (2019)
• Audit note (2026-08-31): the reporter citation replaces the docket-only form.
• Statute Applied: N.J.S.A. 17B:24-1.1(b) (insurable interest); N.J.S.A. 17B:25-4 (incontestability)
• Brief Summary: In 2007, Sun Life issued a $5 million life insurance policy on Nancy Bergman to a trust whose sole beneficiary members were investors — all strangers to her — who paid most of the premiums. The application overstated her income and wealth, and five other policies totaling $37 million were taken out on her life the same year. After the trust sold the policy and Bergman died in 2014, Wells Fargo, which acquired the policy in a bankruptcy settlement, sought the death benefit. Sun Life instead sought a declaratory judgment that the policy was void ab initio. The Supreme Court addressed whether a stranger-originated life insurance policy lacking an insurable interest is void from the beginning under N.J.S.A. 17B:24-1.1(b), holding that such policies, procured as investments in a person's death, violate the statute's insurable-interest requirement and public policy.
• Source Link: https://www.njcourts.gov/system/files/court-opinions/2019/a_49_17.pdf

Section 4: ELI-10 Application & Case Example 2

Real World Example (Explained Simply)

Imagine your parents buy a car insurance policy and list you as a driver on it. One day a car without enough insurance hits you, and your family's insurance company is supposed to step in and pay up to $100,000 for your injuries. But the company points to a tiny clause in the back of the policy and says: "Because you are just a listed driver, we only owe $15,000." That feels like a trick — the front page of the policy promised you $100,000 of coverage, and your parents paid for it. Title 17B is the reason courts look at the whole picture and say: if the paperwork the customer was given promises $100,000, the company cannot quietly shrink that promise in the fine print. The insurance company must honor what a reasonable family was led to expect.

Case Example

• Case Name & Citation: Motil v. Wausau Underwriters Insurance Co., No. A-0400-23 (App. Div. Apr. 5, 2024)
• Statute Applied: N.J.S.A. 17B:30-13.1 (unfair claim settlement practices; coverage framework under Title 17B)
• Brief Summary: Britney Motil was injured in an automobile accident while driving a "covered auto" with an accepted alternate garaging address under her parents' policy, which carried $100,000 in underinsured motorist (UIM) coverage. Her complaint expressly pleaded N.J.S.A. 17B:30-13.1, and her insurer disclaimed full coverage, invoking a step-down provision in the UM/UIM endorsement that limited a non-named-insured driver to $15,000. The Appellate Division affirmed the Law Division's grant of summary judgment awarding $100,000 in UIM coverage, holding that the declaration page and the endorsement contradicted each other and that, under the reasonable expectations doctrine, the policyholder was led to expect that a covered driver paying the same uninsured premium was entitled to the full $100,000. The decision illustrates how courts apply Title 17B's framework to protect insureds from ambiguous policy provisions.
• Source Link: https://www.njcourts.gov/system/files/court-opinions/2024/a0400-23.pdf