[First Reprint]

ASSEMBLY, No. 2421

 

STATE OF NEW JERSEY

 

INTRODUCED OCTOBER 7, 1996

 

 

By Assemblymen GARRETT, Bateman, Felice and Arnone

 

 

An Act concerning automobile insurance and amending and supplementing P.L.1988, c.156.

 

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

 

    1. (New section) This act shall be known and may be cited as the "Automobile Insurance Surcharge Elimination Act."

 

    2. Section 6 of P.L.1988, c.156 (C.17:29A-45) is amended to read as follows:

    6. a. 1[Notwithstanding the provisions of P.L.1944, c.27 (C.17:29A-1 et seq.) to the contrary, every] Every1 insurer transacting or proposing to transact private passenger automobile insurance may file one or more rating plans in the voluntary market [for standard risks, or non-standard risks, or both. Within 30 days following the effective date of this 1988 amendatory and supplementary act, every]. Every insurer writing private passenger automobile insurance in this State which intends to write coverage in the voluntary market using more than one rate level shall file with the commissioner the rates and underwriting rules which are applicable to each rate level.

    b. An insurer which intends to use more than one rating plan 1[, and which has a rating plan on file as of the effective date of this [1988] 1996 amendatory and supplementary act,]1 may make an initial filing for [the] 1[any]1 additional rating [plan] plans 1[in which the modification of the plan on file is expressed as] which are based on 1 a percentage increase or decrease of the existing rate level 1in its current rating plan1.

    c. Notwithstanding any other law to the contrary, any 1initial1 rates filed pursuant to subsection b. of this section shall be deemed to be approved if not disapproved by the commissioner within 1[60] 901 days. Any subsequent modification of any rate level other than that provided for in section 5 of [this 1988 amendatory and supplementary act] P.L.1988, c.156 (C.17:29A-44), or any initial rate level which is not 1[expressed as] based on1 a percentage increase or decrease of an existing rate level as provided for in this section, shall be subject to the provisions of P.L.1944, c.27 (C.17:29A-1 et seq.).

    d. Any limitation on rates established by the provisions of section 7 of P.L.1983, c.65 (C.17:29A-36) shall apply separately to each rate level established pursuant to subsection a. of this section.

    e. 1[Every insurer shall maintain such data for each rate level as may be required by the commissioner by regulation for the purpose of determining excess profits pursuant to the provisions of P.L.1988, c.118 (C.17:29A-5.6 et seq.).] Deleted by amendment, P.L. , c. .)1

    f. [No more than 15 percent of the aggregate number of private passenger automobile non-fleet exposures being written in the total private passenger automobile insurance market in this State shall be provided through the non-standard voluntary market as defined by rule or regulation of the commissioner adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). If the commissioner certifies that 15 percent or more of the aggregate number of private passenger automobile non-fleet exposures being written in the total private passenger automobile insurance market in this State are insured in the non-standard voluntary market, no insurer transacting automobile insurance in this State shall refuse to issue or renew an automobile insurance policy in the voluntary market for an eligible person as defined in section 25 of P.L.1990, c.8 (C.17:33B-13) until such time that the commissioner certifies that the non-standard market comprises less than 15 percent of the aggregate number of private passenger automobile non-fleet exposures being written in the total private passenger automobile insurance market in this State.] (Deleted by amendment, P.L. , c. .)

    g. [Notwithstanding any provision of this or any other section of law to the contrary, no insurer shall file, nor shall the commissioner approve, any rates filed for non-standard risks in the voluntary market in excess of 135 percent of the cost of private passenger automobile insurance in the voluntary market in this State as determined by the commissioner.] (Deleted by amendment, P.L. , c. .)

    h. [The commissioner shall monitor and report to the Legislature, on March 1, 1992, and annually thereafter, the number of private passenger automobile non-fleet exposures insured in the standard market on December 31 of the preceding calendar year and the number of such exposures insured in the non-standard market on December 31 of the preceding calendar year.] (Deleted by amendment, P.L. , c. .)

(cf: P.L.1990, c.8, s.37)


    3. Section 7 of P.L. 1988, c.156 (C.17:29A-46) is amended to read as follows:

    7. a. Insurers shall put in writing all underwriting rules applicable to each rate level utilized pursuant to section 6 of [this 1988 amendatory and supplementary act] P.L.1988, c.156 (C.17:29A-45). 1An insurer may take into account actuarially justified factors, including, but not limited to, driving record characteristics appropriate for underwriting and classification in formulating its underwriting rules.1 No underwriting rule shall operate in such a manner as to assign a risk to a rating plan on the basis of the territory in which the insured resides. An insurer which knowingly fails to transact automobile insurance consistently with its underwriting rules shall be subject to a fine of not less than $500.00 for each violation.

    b. All underwriting rules applicable to each rate level as provided for in section 6 of [this 1988 amendatory and supplementary act] P.L.1988, c.156 (C.17:29A-45) shall be filed with the commissioner and shall be subject to his prior approval. All underwriting rules shall be subject to public inspection. Insurers shall apply their underwriting rules uniformly and without exception throughout the State, so that every applicant or insured conforming with the underwriting rules will be insured or renewed, and so that every applicant not conforming with the underwriting rules will be refused insurance.

    c. (Deleted by amendment, P.L.1990, c.8.)

    d. (Deleted by amendment, P.L.1990, c.8.)

    e. An insurer with more than one rating plan for private passenger automobile insurance policies providing identical coverages shall not adopt underwriting rules which would permit a 1[person] private passenger automobile1 to be insured under more than one of the rating plans.

(cf: P.L. 1990, c.8, s.38)

 

    4. (New section) 1[No] Except for a plan established pursuant to section 1 of P.L.1970, c.215 (C.17:29D-1), and except as otherwise provided in subsection a. of section 5 of this 1996 amendatory and supplementary act, no1 insurer shall charge or collect surcharges 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) or the schedule of automobile insurance eligibility points promulgated by the Commissioner of Banking and Insurance pursuant to section 26 of P.L.1990, c.8 (C.17:33B-14).

 

    5. (New section) 1a.1 Any 1initial1 rate filing made 1on or after the enactment date of this 1996 amendatory and supplementary act1 pursuant to the provisions of section 6 of P.L.1988, c.156 (C.17:29A-45) shall be revenue neutral for the insurer 1with respect to eligible persons, as defined in section 25 of P.L.1990, c.8 (C.17:33B-13), insured by the insurer. If that initial rate filing by an insurer has not been approved by the Commissioner of Banking and Insurance, or deemed approved pursuant to subsection c. of section 6 of P.L.1988, c.156 (C.17:29A-45), on or prior to the effective date of this 1996 amendatory and supplementary act, the current effective rate filing of the insurer shall continue in effect until that initial rate filing is approved by the commissioner1.

    1b. An insurer shall provide to the commissioner a certification by an actuary that the initial rate filing pursuant to subsection a. of this section is revenue neutral, and no other approval by the commissioner is required with respect to revenue neutrality.1

 

    6. (New section) To provide for 1[a] an orderly1 transition with minimum disruption to the private passenger automobile insurance market, the Commissioner of Banking and Insurance shall 1[promulgate regulations providing] establish administrative processes that are reasonable, necessary, appropriate and consistent with the provisions of this 1996 amendatory and supplementary act1 for a transition period between the private passenger automobile insurance rating system in effect on the date this section takes effect and implementation of the system of multiple private passenger automobile insurance rate plans established by this 1996 amendatory and supplementary act; and 1[any other] may promulgate1 regulations necessary to effectuate the 1other1 purposes of this 11996 amendatory and supplementary1 act.

 

    7. This act shall take effect on January 1, 1998, except that section 6 of this act shall take effect immediately, and shall apply to private passenger automobile insurance policies issued or renewed on or after that date.

 

 

                                  

"Automobile Insurance Surcharge Elimination Act;" establishes multiple automobile insurance rate plans.