Thought Leadership

On June 24, 2025, the New Jersey Appellate Division issued an unpublished opinion in Lowe v. Audet, A-4093-23, holding that insurance producers remain exempt from liability under the Consumer Fraud Act (CFA) when performing services within the scope of their professional licensure. The decision resolved a lingering question as to whether Shaw v. Shand, which narrowed the scope of the CFA’s learned professional exception and held that licensed home inspectors were not exempt, had implicitly overruled or undermined Plemmons v. Blue Chip Insurance Services, a long-standing case holding that insurance producers are not subject to CFA liability due to their regulated, semi-professional status.

Lowe arose from a dispute involving a neurosurgeon who alleged that his longtime insurance brokers failed to properly advise him about the scope of coverage under various disability insurance policies. After benefits were denied, the plaintiff filed suit, asserting, among other things, claims for professional negligence and a violation of the CFA. The trial court granted the defendants’ motion to dismiss the CFA claim, relying on Plemmons, which held that insurance brokers, as semi-professionals subject to rigorous statutory and regulatory oversight, are not subject to CFA liability for services rendered in their licensed role.

On appeal, the plaintiff argued that Shaw v. Shand rejected the premise that semi-professionals could qualify for CFA immunity and, thereby, narrowed the exemption to only those historically recognized as learned professionals, such as doctors and lawyers. The Appellate Division disagreed, reaffirming Plemmons and holding that Shaw did not overrule it. The panel emphasized that Shaw involved home inspectors, not insurance producers, and that its discussion of the learned professional exception was not intended to apply beyond the context of that case. The court found no basis to depart from the established principle that insurance producers are exempt from CFA claims arising out of their professional services, particularly where they are governed by a detailed regulatory scheme.

The panel also noted that the Legislature has not acted to modify or abrogate Plemmons since it was decided in 2006. That continued legislative silence, the court reasoned, reinforces the conclusion that insurance producers remain outside the scope of the CFA when acting in their licensed capacity.

Although the opinion is currently unpublished, it may be approved for publication in the future and is likely to carry significant persuasive weight in trial courts throughout the state. It provides important clarification for insurers, brokers and litigants by confirming that the CFA does not apply to the core functions performed by licensed insurance professionals.

Impact
This decision offers welcome clarity to insurance professionals and defense counsel, particularly in light of inconsistent trial-level interpretations following Shaw. By reaffirming Plemmons, the New Jersey Appellate Division confirmed that insurance producers are not subject to CFA liability when performing licensed services, even in the face of arguments that Shaw narrowed the scope of the professional exemption. Lowe reinforces the separation between consumer fraud claims and professional malpractice, and it provides a strong basis for motions to dismiss CFA claims currently pending against brokers. While unpublished for now, Lowe is poised to become a key authority in resolving the applicability of the CFA in professional services litigation. 

_{Legal Update for Insurance Agents & Brokers- June 27, 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}