ASSEMBLY INSURANCE COMMITTEE

 

STATEMENT TO

 

ASSEMBLY, No. 2313

 

STATE OF NEW JERSEY

 

DATED: SEPTEMBER 16, 1996

 

      The Assembly Insurance Committee reports favorably Assembly, No. 2313.

      This bill provides that insurers do not have to pay certain personal injury protection (PIP) benefits if the injured person already has PIP benefits coverage under another policy.

      Pursuant to section 11 of P.L.1972, c.70 (C.39:6A-11), if two or more insurers are liable to pay PIP benefits, any insurer paying the benefits can recover from the other insurers an equitable pro-rata share of the benefits paid. This process is commonly referred to as "PIP contribution." Most insurers have recognized that PIP contributions, in most cases, result in a "wash," and accordingly, insurers have not generally exercised the contribution option. This bill eliminates PIP contributions and thereby eliminates an unnecessary expense in the current system without reducing coverage to the consumer.