ASSEMBLY, No. 2913

STATE OF NEW JERSEY

INTRODUCED MAY 5, 1997

By Assemblyman BARNES and Assemblywoman BUONO

An Act providing automobile insurance premium discounts for certain insureds.

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

    1. a. Not later than 180 days after the effective date of this act, every insurer transacting private passenger automobile insurance business in this State shall file rates for private passenger automobile insurance which shall contain a 10 percent premium reduction for personal injury protection coverage, bodily injury liability coverage, property damage coverage, and physical damage coverage for the named insured who has had his private passenger automobile insurance with the same insurer for a period of at least five years and who has not accumulated any automobile insurance eligibility points during the five-year period immediately preceding renewal.

    b. The Commissioner of Banking and Insurance may suspend an insurer's obligation to provide the premium reduction required pursuant to subsection a. of this section, if the commissioner, in her discretion, determines that compliance with this requirement will result in an insurer's financial condition becoming unsafe or unsound. In making this determination, the commissioner shall consider the following factors:

    (1) The insurer's ratio of annual net premiums written to surplus as to policyholders; and

    (2) Whether the insurer, in issuing a premium reduction in compliance with subsection a. of this section, would experience:

    (a) an adverse change in its rating by A.M. Best and Company, Dun and Bradstreet, Moody's or Standard and Poor's;

    (b) financial ratios outside the acceptable ranges as established by the National Association of Insurance Commissioners or the chief financial officer of the Department of Banking and Insurance of this State; or

    (c) a net reduction to the insurer's surplus as to policyholders greater than 25% during a period of two years or less.

    c. Any suspension pursuant to this section shall continue until the commissioner, upon the commissioner's own motion or upon request by the insurer or any other interested party, after providing opportunity for a hearing, orders its revocation.

    2. This act shall take effect immediately.

STATEMENT

    This bill provides for a 10 percent premium reduction for personal injury protection coverage, bodily injury liability coverage, property damage coverage, and physical damage coverage for an insured who has had his private passenger automobile insurance with the same insurer for a period of five years or more and who has not accumulated any automobile insurance eligibility points during the five-year period immediately preceding renewal. This discount is to be utilized as a reward to drivers who exhibit safe driving patterns over an extended period of time.

    The bill provides an exemption for an insurer from providing this premium discount, if it is determined, based upon criteria enumerated in the bill, that it would result in the insurer's financial condition becoming unsafe or unsound.

    The bill requires all insurers transacting private passenger automobile insurance business in this State to make a rate filing to reflect this premium discount within 180 days of the enactment date.

Requires 10 percent premium discount for good drivers who are with same insurer five or more years.