On July 15, 2026, the New Jersey Supreme Court issued a decision overturning lower court rulings that had shielded “semi-professionals” — including insurance brokers, agents, and producers, among others — from regulation and litigation under the New Jersey Consumer Fraud Act (NJCFA).
The Supreme Court’s opinion in Lowe v. Audet will have a significant and immediate impact on the insurance industry in New Jersey. Now, insurance brokers, agents, and producers — and their employers — must ensure they are compliant with the NJCFA, which includes a private right of action and is enforced by the New Jersey attorney general (AG) and the Division of Consumer Affairs. By subjecting these insurance industry participants to the NJCFA — and to regulation by agencies other than the New Jersey Department of Banking and Insurance — the decision is likely to create uncertainty as to how the requirements of the NJCFA will be integrated into established legal frameworks specific to insurance.
More broadly, the New Jersey Supreme Court’s decision expands the reach of the NJCFA by significantly narrowing a longstanding exception for “learned professionals,” while signaling that the Court may eliminate the exception entirely if the state’s legislature does not step in to clarify the statute’s reach.
Background
New Jersey courts frequently describe the NJCFA as one of the nation’s strongest consumer protection statutes. For decades, however, the New Jersey Supreme Court has interpreted the NJCFA to include an implied carveout for “learned professionals,” which lower courts have extended to encompass “semi-professionals.” Many other state statutes governing unfair and deceptive acts and practices do not include this exception.
More recently, the New Jersey AG and lower court judges have questioned the validity and scope of the “learned professionals” exception. They have suggested that the exception is not rooted in the statute’s text, called for revisiting precedents that expanded its reach, and rejected application of the exception to occupations such as home inspectors.
Despite the doubts recently cast on the “learned professionals” exception, the state’s intermediate appellate court in Lowe v. Audet reaffirmed the doctrine and held that insurance brokers are “semi-professionals” who fall within the exception. As a result, the plaintiff in the case — a surgeon who was partially denied coverage under a disability insurance policy obtained through the defendant insurance broker — could not sue the insurance broker under the NJCFA for alleged fraud, deception, and unconscionable commercial practices in marketing and selling the insurance policies, including by allegedly omitting and concealing material facts with the intent to mislead consumers.
New Jersey Supreme Court Decision
In reversing the lower court’s decision, the New Jersey Supreme Court began by reviewing the history of the “learned professionals” exception, which grew out of judicial decisions concluding that the NJCFA was not intended to apply to professionals such as physicians and attorneys who were prohibited from advertising their services at the time the statute was enacted in 1960. Since then, lower courts had applied the exception to other professionals and “semi-professionals.” But these decisions, the Court explained, were not consistent in their approach and had stretched the exception beyond its original rationale and to a point where it undermined the remedial purpose underlying the NJCFA.
As a result, the Supreme Court ruled that semi-professionals like insurance brokers, producers, and agents are generally subject to — not exempt from — the NJCFA.
The Supreme Court did not eliminate the “learned professionals” exception entirely. Although the Court observed that the exception “does not appear in the text of the [NJCFA]” and that the Court has “serious doubts about the basis” for the exception, the Court decided to “await a case that presents a direct challenge to address it.” In the meantime, the Court “invite[d] the Legislature to provide clarity about whether certain professionals are exempt from liability under the [NJCFA], and if so, to identify the relevant professionals.”
Why It Matters
Insurance professionals who do business in New Jersey — and companies that employ them — are immediately subject to new regulatory and litigation risks. The potential exposure is significant. Private plaintiffs can recover treble damages, attorneys’ fees, and costs, among other relief.
In addition, the NJCFA is enforced by the AG and Division of Consumer Affairs, which may impose civil penalties of up to $10,000 for the first violation and $20,000 for subsequent violations. These regulators may wield their new authority in ways that the insurance industry’s primary state regulator, the Department of Banking and Insurance, would not. At a time when state AGs are focused on affordability and insurance costs have been increasing, the insurance industry should anticipate heightened regulatory scrutiny.
As a result, insurance industry participants should immediately review their policies and procedures for compliance with the NJCFA and its implementing regulations. This review should include advertising, pricing, disclosures, and product tie-ins. Companies also should evaluate practices that have drawn recent criticism from state AGs, such as “junk fees.”
Integrating the NJCFA into the established legal frameworks governing the conduct of insurance brokers, producers, and agents will present complex legal questions that must be addressed in a newly unsettled and uncertain regulatory context. There may be instances in which certain applications of the NJCFA would be inconsistent with — and give way to — laws specific to the insurance industry. On the other hand, the AG and Division of Consumer Affairs may seek to address violations of insurance laws by treating those violations as violations of the NJCFA, subject to the NJCFA’s distinct penalty structure.
The impact of the New Jersey Supreme Court’s decision will not be limited to the insurance industry. Practitioners of other professions that may be characterized as “semi-professionals” now face increased litigation and regulatory risks, which they similarly should take steps to mitigate. And the Court’s “serious doubts” about the “learned professionals” exception suggest that even physicians and attorneys may soon find themselves subject to the NJCFA.
