ASSEMBLY, No. 1704

STATE OF NEW JERSEY

INTRODUCED MARCH 11, 1996

By Assemblyman CHARLES

An Act concerning the reduction of certain points used to calculate surcharges on private passenger automobile insurance and supplementing P.L.1990, c.8 (C.17:33B-1 et seq.).

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

    1. a. In calculating a surcharge based on motor vehicle violation penalty points promulgated by the Director of the Division of Motor Vehicles pursuant to section 1 of P.L.1982, c.43 (C.39:5-30.5), including any surcharge based on the schedule of automobile insurance eligibility points promulgated by the Commissioner of Insurance pursuant to section 26 of P.L.1990, c.8 (C.17:33B-14), an insurer shall reduce the number of points recorded against an insured at the rate of three points for each 12 consecutive months in which the insured has not committed any violation either resulting in the assessment of points or in the suspension of driving privileges or in which the insured has not been assessed any additional automobile insurance eligibility points. Points recorded against an insured shall also be reduced by three points if the insured attends and satisfactorily completes a license improvement course approved by the Division of Motor Vehicles, except that no insured may receive point reduction credits for completion of the same or a similar course within two years of having completed the original course. Points shall also be reduced by two points if the insured attends and satisfactorily completes an approved motor vehicle defensive driving course pursuant to section 55 of P.L.1990, c.8 (C.17:33B-45), except that no insured may receive point reduction credits for completion of an approved defensive driving course within five years of having previously completed an approved motor vehicle defensive driving course. No points shall be reduced below zero in calculating a surcharge. No points for operating a motor vehicle under the influence of alcohol or drugs shall be reduced pursuant to the provisions of this subsection. No points of an insured shall be reduced for completing a license improvement course or a motor vehicle defensive driving course pursuant to this subsection unless that insured has the greater number of points under the policy.

    b. Computation of the time periods used in granting point reduction credits shall in all cases be based upon the respective dates of commission of the offenses for which the insured was convicted and assessed points.

    c. As used in this section, "insurer" means and includes an insurer writing private passenger automobile insurance in the voluntary market and any insurance plan established to provide private passenger automobile insurance pursuant to section 1 of P.L.1970, c.215 (C.17:29D-1).

    d. The reduction of points pursuant to subsection a. of this section shall not be used in determining whether a person is an eligible person pursuant to sections 25 through 30 of P.L.1990, c.8 (C.17:33B-13 through 17:33B-18).

    2. This act shall take effect immediately.

STATEMENT

    This bill requires automobile insurers to reduce the number of automobile insurance eligibility points resulting in surcharges to insureds in a similar manner to that currently followed by the Division of Motor Vehicles with respect to motor vehicle points.

    Automobile insurers would be required to reduce an insured's automobile insurance eligibility points at the rate of: (a) three points for each 12-month period in which the insured has not committed any violation resulting in an assessment of automobile insurance eligibility points or the suspension of his license; (b) three points for successful completion of an approved license improvement course, except that no insured may receive point reduction credits for completion of the same or a similar course within two years of having completed the prior course; and (c) two points for the successful completion of an approved defensive driving course, except that no insured may receive point reduction credits for completion of an approved defensive driving course within five years of having previously completed an approved motor vehicle defensive driving course. No points shall be reduced below zero. No points for operating a motor vehicle under the influence of alcohol or drugs shall be reduced pursuant to the provisions of this bill and no points of an insured shall be reduced for completing a license improvement course or a motor vehicle defensive driving course pursuant to this bill unless that insured has the greater number of points under the policy.

    This bill applies to insurers writing private passenger automobile insurance in the voluntary market and to the personal automobile insurance plan (residual market).

    The bill provides that the point reductions for purposes of calculating surcharges on automobile insurance policies provided by the bill are not to be used to determine whether an insured is to be written in the voluntary market or the residual market (personal automobile insurance plan).

Requires insurers to reduce points used in assessing surcharges according to same schedule used by DMV.