ASSEMBLY, No. 249

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman GARCIA

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

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

    1. Section 27 of P.L.1990, c.8 (C.17:33B-15) is amended to read as follows:

    27. a. On or after April 1, 1992, every insurer, either by one or more separate rating plans filed in accordance with the provisions of section 6 of P.L.1988, c.156 (C.17:29A-45) or through one or more affiliated insurers, shall provide automobile insurance coverage for eligible persons.

    b. No insurer shall refuse to insure, refuse to renew, or limit coverage available for automobile insurance to an eligible person who meets its underwriting rules as filed with and approved by the commissioner in accordance

with the provisions of section 7 of P.L.1988, c.156 (C.17:29A-46). The commissioner may suspend, revoke or otherwise terminate the certificate of authority to transact automobile insurance business in this State of any insurer who violates the provisions of this section.

    c. An insurer shall either bind coverage or issue a declination of coverage pursuant to section 28 of P.L.1990, c.8 (C.17:33B-16) to an applicant for automobile insurance by the requested coverage effective date or within three business days of the receipt of a completed application by an insurer, or insurance producer authorized to accept the application on behalf of the insurer, whichever is later. Failure to bind or decline coverage within this time period shall be considered an acceptance by the insurer to provide automobile insurance coverage to the applicant and shall result in the coverage being bound by the insurer.

(cf: P.L.1990, c.8, s.27)

    2. This act shall take effect on the 30th day following enactment.

STATEMENT

    This bill requires an automobile insurer either to bind coverage or to issue a declination of coverage to an applicant for automobile insurance by the requested coverage effective date or within three business days of the receipt of a completed application by the insurer, or an insurance producer authorized to accept applications on behalf of an insurer, whichever is later. Failure to bind or decline coverage within this time period would be considered an acceptance by the insurer to provide coverage to the applicant and result in coverage being bound.

Requires auto insurers to bind or decline coverage within three business days.