ASSEMBLY, No. 248

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman GARCIA and Assemblywoman GILL

An Act concerning automobile insurance coverage for eligible persons and amending P.L.1990, c.8.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 33 of P.L.1990, c.8 (C.17:33B-21) is amended to read as follows:

    33. If the commissioner determines that any person has violated any provision of sections 26 through 30 of this 1990 amendatory and supplementary act, he may impose a civil penalty in an amount of up to[$2,000] $5,000 for the first violation [and], up to[$5,000] $10,000 for the second and up to $25,000 for each subsequent violation, collectible in an action brought in the name of the commissioner pursuant to the provisions of "the penalty enforcement law," N.J.S.2A:58-1 et seq. For the purposes of this section, each declination shall be deemed to constitute a separate violation.

(cf: P.L.1990, c.8, s.33)

    2. This act shall take effect immediately.

STATEMENT

    There is a concern that motorists who live in certain geographic areas may have difficulty obtaining automobile insurance coverage because the geographic areas in which those motorists live are considered to be "high risk" areas. The practice of refusing to write business in certain geographic areas is known as "redlining."

    Under current law, insurers are required to provide automobile insurance coverage to any "eligible person," regardless of where the person lives, unless the insurer is in an unsafe or unsound financial condition, as determined by the Commissioner of Insurance. Current law provides for civil penalties to be imposed by the commissioner for violations of this law in amounts up to $2,000 for the first violation and $5,000 for the second and each subsequent violation.

    If enacted, this bill will serve as a further deterrent to redlining practices by increasing the maximum civil penalties: from $2,000 to $5,000 for the first violation; from $5,000 for the second and subsequent violations to $10,000 for the second violation; and imposing an increased maximum penalty of $25,000 for each subsequent violation.

Increases civil penalties imposed on auto insurers that fail to provide coverage to eligible persons.