SENATE, No. 2151

STATE OF NEW JERSEY

INTRODUCED JUNE 5, 1997

By Senator LITTELL

An Act concerning the special purpose apportionment of insurers and amending P.L.1995, c.156.

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

    1. Section 13 of P.L.1995, c.156 (C.17:1C-31) is amended to read as follows:

    13. The total amount assessable to companies in any fiscal year for all special purpose assessments made pursuant to applicable law as of the effective date of this act, including the special purpose apportionment established by this act, shall not increase, as a percentage, more than the percentage increase in the combined net written premiums received, as defined in subsection b. of section 2 of this act, by all companies for the previous year, except that, with respect to fiscal year 1998 and each fiscal year thereafter, the total amount of all direct and indirect expenditures incurred by the Division of Insurance Fraud Prevention in connection with the appointment of additional insurance fraud investigators pursuant to the Special Purpose appropriation in P.L. c. (the FY 1998 appropriations bill), may be included in the special purpose apportionment, notwithstanding any limitation on the total amount assessable to companies under this section.

(cf: P.L.1995,c.156,s.13)

    2. This act shall take effect on July 1, 1997.

STATEMENT

    The Governor's FY 1998 Budget Recommendation includes a new, Special Purpose appropriation of $2.25 million to hire 50 additional insurance fraud investigators for the Division of Insurance Fraud Prevention in the Department of Banking and Insurance. This bill includes the direct and indirect costs associated with the hiring of those additional fraud investigators in the special purpose apportionment imposed by section 2 of P.L.1995, c.156 (C.17:1C-20), a special funding mechanism of the department, notwithstanding the statutory limitation or "cap" on the total amount assessable to insurance companies under the special purpose apportionment. This enables the department to recover from insurers the cost of the proposed additional fraud investigators in FY 1998 and subsequent fiscal years.

     The FY 1998 Budget Recommendation to expand the staff of the Division of Insurance Fraud Prevention, as well as its duties and responsibilities, is related to the automobile insurance reforms recently proposed by the Governor.

Includes certain Division of Insurance Fraud Prevention expenditures in special purpose apportionment notwithstanding statutory cap.