SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 557
STATE OF NEW JERSEY
ADOPTED JUNE 20, 1996
Sponsored by Senator MATHEUSSEN
An Act concerning the renewal of automobile insurance policies and amending P.L.1988, c.119.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 26 of P.L.1988, c.119 (C.17:29C-7.1) is amended to read as follows:
26. a. Notwithstanding the provisions of section 3 of P.L.1972, c.70 (C.39:6A-3), a licensed insurer may, in accordance with subsections b. and c. of this section, refuse to renew a policy of private passenger automobile insurance that provides coverage required to be maintained pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.).
b. For each calendar year period, an insurer may issue notices of intention not to renew an automobile insurance policy in the voluntary market in an amount not to exceed 2% of the total number of voluntary market automobile insurance policies of the insurer, rounded to the nearest whole number, which are in force at the end of the previous calendar year in each of the insurer's rating territories in use in this State, subject to a fair and nondiscriminatory formula developed by rule or regulation of the commissioner.
c. For every two newly insured automobiles which an insurer voluntarily writes in each territory during each calendar year period, the insurer shall be permitted to refuse to renew one additional policy of automobile insurance in that territory in excess of the 2% limitation established by subsection b. of this section, subject to a fair and nondiscriminatory formula developed by rule or regulation of the commissioner. [For the purposes of this section, "voluntarily writes" shall not include any exposure voluntarily written by or assigned to an insurer to meet any quota established pursuant to section 26 of P.L.1983, c.65 (C.17:30E-14)] The nonrenewal provisions of this subsection shall be permitted only in rating territories in which the
insurer experiences growth in the aggregate number of in-force exposures.
d. The provisions of this section shall not apply to any cancellation made pursuant to subsection (A) of section 2 of P.L.1968, c.158 (C.17:29C-7).
e. [The commissioner shall monitor the implementation and operation of this section and shall report his findings, including any legislative proposals, to the Senate Labor, Industry and Professions Committee and the Assembly Insurance Committee, or their successors, within three years of the effective date of this act.] (Deleted by amendment, P.L. , c. .)
f. Notwithstanding the provisions of subsections a., b. and c. of this section to the contrary, no insurer shall refuse to renew any policies pursuant to subsections b. and c. of this section: (1) in an amount in excess of 10% of the entire automobile insurance book of business of any one producer in force at the end of the previous calendar year; or (2) in which the insured has been insured by the insurer or one or more affiliated insurers for 10 or more years, has not experienced more than one at-fault accident within the immediately preceding 10 years which resulted in the payment by the insurer of at least twice the insurance premium paid for the automobile during the policy year in which the accident occurred, has not accumulated more than four automobile insurance eligibility points, exclusive of any automobile insurance eligibility points for at-fault accidents, during the immediately preceding three-year period, and is not otherwise eligible for automobile insurance coverage pursuant to section 1 of P.L. 1970, c. 215 (C.17:29D-1). For purposes of this subsection, “producer” means a licensed insurance producer who earned $7,500 or more in compensation from the insurer in the prior calendar year. The commissioner shall monitor the implementation and operation of this subsection and may promulgate regulations to effectuate the purposes of this subsection and may by regulation expand the definition of an insured who shall not be eligible to be nonrenewed pursuant to paragraph (2) of this subsection.
(cf: P.L.1988, c.119, s.26)
2. This act shall take effect immediately.
Modifies “2 for 1” and “2%” rules for nonrenewal of automobile insurance policies to protect producers.