ASSEMBLY, No. 2469

 

STATE OF NEW JERSEY

 

INTRODUCED NOVEMBER 14, 1996

 

 

By Assemblymen LeFEVRE, BLEE, Gibson, Moran and Connors

 

 

An Act concerning homeowners insurance in certain parts of New Jersey.

 

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

 

    1. Within 180 days of the effective date of this act, every insurer writing homeowners insurance in this State shall insure its share of the homeowners insurance market in the shore area on the basis of its historical Statewide market share. For the purpose of this section, "historical Statewide market share" means the average percentage of the total homeowners insurance market insured by the insurer in 1989, 1990 and 1991.

    The Commissioner of Banking and Insurance shall define the geographical extent of the shore area and establish the methodology by which the historical Statewide market share is determined. In determining the historical Statewide market share, the commissioner may consider the number of homeowners insurance policies issued, the number of homeowners insurance policyholders, or the amount of net premiums for homeowners insurance written, in 1989, 1990 and 1991. The commissioner may order these insurers to complete a survey to determine their historical Statewide market shares.

    In implementing the provisions of this act, the commissioner may rely upon information provided by insurance rating or advisory organizations.

 

    2. This act shall take effect immediately.

 

 

STATEMENT

 

    The characteristics of the homeowners insurance market changed drastically in the aftermath of Hurricane Andrew in 1992. Insurers substantially altered their marketing activities, resulting in a dislocation in the homeowners insurance market in the shore area of this State.

    However, this reaction is not reasonable, because writing homeowners insurance in New Jersey coastal areas is far different than writing homeowners insurance in Florida or North Carolina, for example. Therefore, this bill requires insurers to write their share of homeowners insurance in the shore area at the same volume that they wrote homeowners insurance on a Statewide basis in the years of 1989, 1990 and 1991. This bill will assure that insurers which have abandoned the New Jersey shore communities by nonrenewing or canceling homeowners insurance policies do not receive a benefit for their improper behavior.

 

 

                            

 

Requires insurers to write their share of homeowners insurance in the shore area.