SENATE, No. 2248

 

STATE OF NEW JERSEY

 

INTRODUCED NOVEMBER 17, 1997

 

 

By Senator RICE

 

 

An Act concerning private passenger automobile insurance rates.

 

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

 

    1. a. Notwithstanding any other provision of law to the contrary, rates and premiums for private passenger automobile insurance shall not be determined, in whole or in part, directly or indirectly, upon territory.

    b. An initial rate filing made by an insurer pursuant to subsection a. of this section shall be revenue neutral for the insurer.

 

    2. This act shall take effect on January 1, 1998 and shall apply to private passenger automobile insurance policies issued or renewed on or after that date.

 

STATEMENT

 

    This bill provides that rates and premiums for private passenger automobile insurance shall not be determined, in whole or in part, directly or indirectly, upon territory. Currently, automobile insurers may use geographic areas referred to as rating territories as an underwriting factor in determining an individual's automobile insurance premium. As a result, individuals who reside in urban areas usually pay higher automobile insurance rates than individuals who reside in suburban areas. This bill would eliminate territory or geographic location as a factor in determining an individual's automobile insurance rate.

    An initial rate filing made by an insurer pursuant to the provisions of the bill shall be revenue neutral for the insurer.

    The bill would become effective on January 1, 1998, and would apply to automobile insurance policies issued or renewed on or after that date.

 

                           

 

Prohibits use of territory in formulating automobile insurance rates.