SENATE, No. 63
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Senators CAFIERO and MATHEUSSEN
An Act concerning automobile insurance accident surcharges and amending P.L.1983, c.65 and P.L.1990, c.8.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 6 of P.L.1983, c.65 (C.17:29A-35) is amended to read as follows:
6. a. A merit rating accident surcharge system for private passenger automobiles may be used in the voluntary market[, by the New Jersey Automobile Full Insurance Underwriting Association created pursuant to section 16 of P.L.1983, c.65 (C.17:30E-4), by the Market Transition Facility created pursuant to section 88 of P.L.1990, c.8 (C.17:33B-11),]and by any insurance plan established to provide private passenger automobile insurance pursuant to section 1 of P.L.1970, c.215 (C.17:29D-1). No surcharges shall be imposed on or after the [operative] effective date of this 1994 amendatory act, unless there is an at-fault accident within a three-year period immediately preceding the effective date of coverage which results in payment by the insurer of [at least a $300.00] a claim which is at least equal to, or in excess of, the amount of the named insured's annual premium. All moneys collected under this subsection shall be retained by the insurer assessing the surcharge. Accident surcharges shall be imposed for a three-year period and shall, for each filer, be uniform on a Statewide basis without regard to classification or territory.
b. There is created a New Jersey Merit Rating Plan which shall apply to all drivers and shall include, but not be limited to, the following provisions:
(1) (a) Plan surcharges shall be levied, beginning on or after January 1, 1984, by the Division of Motor Vehicles on any driver who has accumulated, within the immediately preceding three year period, beginning on or after February 10, 1983, six or more motor vehicle points, as provided in Title 39 of the Revised Statutes, exclusive of any points for convictions for which surcharges are levied under paragraph (2) of this subsection; except that the allowance for a reduction of points in Title 39 of the Revised Statutes shall not apply for the purpose of determining surcharges under this paragraph. Surcharges shall be levied for each year in which the driver possesses six or more points. Surcharges assessed pursuant to this paragraph shall be not less than $100.00 for six points, and not less than $25.00 for each additional point. The commissioner may increase the amount of surcharges as he deems necessary to effectuate the purposes of P.L.1983, c.65 (C.17:29A-33 et al.), and may, pursuant to regulation, permit the deferral of all or part of any surcharges authorized by this subsection until the end of the policy term of an automobile insurance policy with an effective date prior to January 1, 1984, upon presentation of appropriate evidence that an insured has already paid an equivalent surcharge arising from the same motor vehicle violation or conviction.
(b) (Deleted by amendment, P.L.1984, c.1.)
(2) Plan surcharges shall be levied for convictions (a) under R.S.39:4-50 for violations occurring on or after February 10, 1983, and (b) under section 2 of P.L.1981, c.512 (C.39:4-50.4a), or for offenses committed in other jurisdictions of a substantially similar nature to those under R.S.39:4-50 or section 2 of P.L.1981, c.512 (C.39:4-50.4a), for violations occurring on or after January 26, 1984. Surcharges under this paragraph shall be levied annually for a three year period, and shall be not less than $1,000.00 per year for each of the first two convictions, and not less than $1,500.00 per year for the third conviction occurring within a three year period. If a driver is convicted under both R.S.39:4-50 and section 2 of P.L.1981, c.512 (C.39:4-50.4a) for offenses arising out of the same incident, the driver shall be assessed only one surcharge for the two offenses. The commissioner may increase the amount of surcharges as he deems necessary to effectuate the purposes of P.L.1983, c.65 (C.17:29A-33 et al.), and may, pursuant to regulation, permit the deferral of all or any part of these surcharges as provided in paragraph (1)(a) of this subsection.
If, upon written notification from the Division of Motor Vehicles, mailed to the last address of record with the division, a driver fails to pay a surcharge levied under this subsection, the license of the driver shall be suspended forthwith until the surcharge is paid to the Division of Motor Vehicles; except that upon satisfactory showing of indigency, the Division of Motor Vehicles may authorize payment of the surcharge on an installment basis over a period not to exceed 10 months.
For the purposes of this subparagraph, "indigency" shall be defined in rules and regulations promulgated by the Director of the Division of Motor Vehicles.
All moneys collectible under this subsection shall be billed and collected by the Division of Motor Vehicles. Of the moneys collected: 10%, or the actual cost of administering the collection of the surcharge, whichever is less, shall be retained by the Division of Motor Vehicles; five percent, or the actual cost of administering the cancellation notification system established pursuant to section 50 of P.L.1990, c.8 (C.17:33B-41), whichever is less, shall be retained by the Division of Motor Vehicles; and prior to October 1, 1991, the remainder shall be remitted to the New Jersey Automobile Full Insurance Underwriting Association and on or after October 1, 1991, the remainder shall be remitted to the New Jersey Automobile Insurance Guaranty Fund created pursuant to section 23 of P.L.1990, c.8 (C.17:33B-5). From the date of certification by the Commissioner of Insurance that the monies collectible under this subsection are no longer needed to fund the association debt, monies collectible under this subsection shall be remitted to the New Jersey Property-Liability Guaranty Association created pursuant to section 6 of P.L.1974, c.17 (C.17:30A-6) to be used for payment of any loans made by that association to the New Jersey Automobile Insurance Guaranty Fund pursuant to paragraph (10) of subsection a. of section 8 of P.L.1974, c.17 (C.17:30A-8).
(3) In addition to any other authority provided in P.L.1983, c.65 (C.17:29A-33 et al.), the commissioner, after consultation with the Director of the Division of Motor Vehicles, is specifically authorized (a) to increase the dollar amount of the surcharges for motor vehicle violations or convictions, (b) to impose, in accordance with paragraph (1)(a) of this subsection, surcharges for motor vehicle violations or convictions for which motor vehicle points are not assessed under Title 39 of the Revised Statutes, or (c) to reduce the number of points for which surcharges may be assessed below the level provided in paragraph (1)(a) of this subsection, except that the dollar amount of all surcharges levied under the New Jersey Merit Rating Plan shall be uniform on a Statewide basis for each filer, without regard to classification or territory. Surcharges adopted by the commissioner on or after January 1, 1984 for motor vehicle violations or convictions for which motor vehicle points are not assessable under Title 39 of the Revised Statutes shall not be retroactively applied but shall take effect on the date of the New Jersey Register in which notice of adoption appears or the effective date set forth in that notice, whichever is later.
c. No motor vehicle violation surcharges shall be levied on an automobile insurance policy issued or renewed on or after January 1, 1984, except in accordance with the New Jersey Merit Rating Plan, and all surcharges levied thereunder shall be assessed, collected and distributed in accordance with subsection b. of this section.
d. (Deleted by amendment, P.L.1990, c.8.)
e. The Commissioner of Insurance and the Director of the Division of Motor Vehicles as may be appropriate, shall adopt any rules and regulations necessary or appropriate to effectuate the purposes of this section.
(cf: P.L.1990, c.8, s.35)
2. Section 26 of P.L.1990, c.8 (C.17:33B-14) is amended to read as follows:
26. The commissioner shall, within 90 days of the effective date of this act, promulgate a schedule of automobile insurance eligibility points by rule or regulation adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The schedule shall assess a point valuation to driving experience related violations and shall include assessments for violations of lawful speed limits within such increments as determined by the commissioner, other moving violations, and at-fault accidents. For the purposes of this section, an "at-fault accident" means an at-fault accident which results in payment by the insurer of [at least a $500] a claim which is at least equal to, or in excess of, the amount of the named insured's annual premium.
(cf: P.L.1990, c.8, s.26)
3. This act shall take effect immediately and shall apply to private passenger automobile insurance policies issued or renewed in this State on or after January 1, 1995.
STATEMENT
This bill revises the criteria under which an insurer may assess an accident surcharge for an at-fault accident under an insured's automobile insurance policy.
Currently, there are two definitions of "at-fault accident" under which an insurer may impose an accident surcharge. Under the merit rating accident surcharge system pursuant to the provisions of section 6 of P.L.1983, c.65 (C.17:29A-35), a surcharge may be imposed if the insurer has made payment on a claim of at least $300. More recently, under the "Fair Automobile Insurance Reform Act of 1990," or FAIR Act, an insurer may impose a surcharge in accordance with the schedule of automobile insurance eligibility points promulgated by the commissioner pursuant to the provisions of section 26 of P.L.1990, c.8 (C.17:33B-14) if the insurer has made payment on a claim of at least $500. In practice, however, only the higher amount of $500 may used by insurers.
The bill amends the definition of "at-fault accident" in both statutes to mean an accident which results in payment by the insurer of a claim which is at least equal to, or in excess of, the amount of the named insured's annual premium.
Revises criteria for imposition of automobile insurance accident surcharges.