With similar federal legislation stalled currently, New Jersey has stepped forward with its own proposal to protect insurance companies that do business with the insurance industry.
If enacted into law, this legislation would benefit not just insurers but also policyholders. As Zach Roman and I discussed in a prior client alert (that can be found here: https://www.reedsmith.com/en/perspectives/2019/08/bipartisan-claim-act-offers-safe-harbor-for-insurers), policyholders would benefit from a more robust insurance market, which should mean more options, increased competition, higher limits, and lower premiums.
In relevant part, the New Jersey legislation provides that "[n]otwithstanding any law to the contrary, a State or local government agency shall not: a. prohibit, penalize, or otherwise discourage an insurer from engaging in the business of insurance in connection with a cannabis-related business; b. terminate, cancel, or otherwise limit the policies of an insurer solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business; c. recommend, incentivize, or encourage an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance and insurance services offered to a policyholder solely because the policyholder is or becomes the owner, operator, or employee of a cannabis-related business; or d. take any adverse or corrective supervisory action on an insurance policy against: (1) a cannabis-related business, solely because the owner or operator owns or operates a cannabis-related business; (2) an employee, owner, or operator of a cannabis-related business, solely because the employee, owner, or operator is employed by, owns, or operates a cannabis-related business, as applicable; or (3) an owner or operator of real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator of the real estate or equipment leased the equipment or real estate to a cannabis-related business, as applicable."
State lawmakers took steps on two bills Thursday that could bring protections for companies that insure cannabis-related companies in the Garden State and also allow those on workers’ compensation to have their medical weed covered. ... The first (A377) protects insurance companies and their employees from retaliation by state or local government if they engage with marijuana-related businesses. The bill cleared committee 11-1 with one abstention.