ASSEMBLY INSURANCE COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 1790

STATE OF NEW JERSEY

DATED: SEPTEMBER 16, 1996

      The Assembly Insurance Committee reports favorably the Assembly Committee Substitute for Assembly Bill No. 1790.

      This committee substitute amends the law which provides for the domestication of certain foreign insurers to clarify the accounting treatment of dividends paid in excess of earned surplus by certain foreign property-casualty insurers that became domestic insurers in 1995. The bill provides that the amount by which those dividends exceed earned surplus is to be considered return of capital and not negative earnings for accounting purposes.

      This Assembly Committee Substitute for Assembly Bill No. 1790 is identical to Senate Bill No. 933 (SCS).