# NJ DOBI Bulletin 2001-11: Invalidity Of Subrogation and Reimbursement Provisions in Previously Approved Contract Forms > New Jersey · Agency guidance · In force URL: https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_11 ## Section - **Citation:** NJ DOBI Bulletin 2001-11 - **Heading:** Invalidity Of Subrogation and Reimbursement Provisions in Previously Approved Contract Forms - **Jurisdiction:** New Jersey - **Kind:** Agency guidance - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** New Jersey Department of Banking and Insurance Bulletins / Invalidity Of Subrogation and Reimbursement Provisions in Previously Approved Contract Forms ## Text Bulletin 01-011 BULLETIN NO. 01-11 TO: ALL NEW JERSEY LICENSED HEALTH INSURANCE COMPANIES, HEALTH MAINTENANCE ORGANIZATIONS, HEALTH SERVICE CORPORATIONS, HOSPITTIAL SERVICE CORPORATIONS AND MEDICAL SERVICE CORPORATIONS FROM: KAREN L. SUTER, COMMISSIONER RE: INVALIDITY OF SUBROGATION AND REIMBURSEMENT PROVISIONS IN PREVIOUSLY APPROVED CONTRACT FORMS On June 26, 2001 the New Jersey Supreme Court issued its decision in Perreira v. Rediger et al., A-145-99. The Court held that the collateral source rule contained in N.J.S.A. 2A:15-97 bars health carriers that expend funds on behalf of covered persons from recouping such payments through subrogation or contract reimbursement. "Health carriers" includes health insurance companies, health maintenance organizations, health service corporations, hospital service corporations and medical service corporations. The Court ruled that: health carriers have no common law equitable right to subrogation; the enactment of N.J.S.A. 2A: 15-97 continued to leave health carriers with no right to recover paid benefits; and the rules adopted by the Department of Banking and Insurance, which allow reimbursement and subrogation provisions in contract forms, must be narrowly interpreted to apply only in cases that do not involve the collateral source rule, e.g., those in which New Jersey law is not applicable. The Court cited only to the rules of the Department of Banking and Insurance that permit subrogation and third party recovery provisions in contracts of health insurers and service corporations. However, similar provisions are also contained in the rules of the Department of Health and Senior Services with respect to subrogation and third party recovery provisions in contracts issued by health maintenance organizations. Those rules are also affected by the Court�s decision. Both Departments will be amending their rules to comply with the decision alth insurers and service corporations. However, similar provisions are also contained in the rules of the Department of Health and Senior Services with respect to subrogation and third party recovery provisions in contracts issued by health maintenance organizations. Those rules are also affected by the Court�s decision. Both Departments will be amending their rules to comply with the decision. Health carriers are therefore directed immediately to cease all subrogation and recovery efforts against persons covered by group or individual contracts or policies issued in New Jersey, except to the extent permitted by N.J.S.A. 2A:15-97, regardless of whether these contracts include subrogation or reimbursement provisions. Such provisions are effective only in those limited situations, for example, in which New Jersey law is inapplicable. 7/5/01 /s/ Karen L. Suter, Commissioner ## Nearby sections - [NJ DOBI Bulletin 2001-01 Effect of PL 1999, C 275 on Life, Health and Annuity Form Filings](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_01.md) - [NJ DOBI Bulletin 2001-02 Extension of Time For Submission of Preliminary Applications for Licensure or Certification as an Organized Delivery System](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_02.md) - [NJ DOBI Bulletin 2001-04 New Jersey Quitnet and New Jersey Quitline](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_04.md) - [NJ DOBI Bulletin 2001-05 Voluntary Market Written Exposure and Primary Classification Data](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_05.md) - [NJ DOBI Bulletin 2001-06 New Jersey Mental Health Parity Law](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_06.md) - [NJ DOBI Bulletin 2001-07 Homeowners Insurance Policies/National Flood Insurance Program](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_07.md) - [NJ DOBI Bulletin 2001-08 Disclosures Mandated By Federal Regulations Adopted Pursuant To Section 305 of the Gramm-Leach-Bliley Act](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_08.md) - [NJ DOBI Bulletin 2001-10 Enforcement Requirements of Gramm-Leach-Bliley Privacy Requirements](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_10.md) - [NJ DOBI Bulletin 2001-11 Invalidity Of Subrogation and Reimbursement Provisions in Previously Approved Contract Forms](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_11.md) - [NJ DOBI Bulletin 2001-12 Maximum Reserve Valuation and Nonforfeiture Rates](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_12.md) - [NJ DOBI Bulletin 2001-13 Unsatisfied Claim and Judgment Fund](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_13.md) - [NJ DOBI Bulletin 2001-14 Disruption and Dislocation Resulting From Tragic Events on September 11, 2001](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_14.md) - [NJ DOBI Bulletin 2001-15 Use of Affidavit In Lieu of a Death Certificate with Respect to Life Insurance Claims Arising Out of the Tragic Events of September 11](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_15.md) - [NJ DOBI Bulletin 2001-16 Annual Premium Survey Information](https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_16.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/NJ_INS_B_2001_11. 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