SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No. 1872

with committee amendments

STATE OF NEW JERSEY

DATED: MAY 8, 1997

      The Senate Commerce Committee reports favorably and with committee amendments Senate Bill No. 1872.

      This bill, as amended by the committee, requires insurance exchanges that have been approved as surplus lines insurers by the Commissioner of Banking and Insurance to be members of the New Jersey Surplus Lines Insurance Guaranty Fund. Insureds of syndicates of these insurance exchanges that are eligible surplus lines insurers will thereby be protected to the same extent as insureds of surplus lines insurers are currently protected in case of insolvencies.

      The committee amended the bill to require that any guaranty fund established by or on behalf of an exchange for the protection of all its insurance exchange policyholders be exhausted before the New Jersey Surplus Lines Insurance Guaranty Fund would be required to pay on covered claims.