SENATE JOINT RESOLUTION No. 51

 

STATE OF NEW JERSEY

 

INTRODUCED JUNE 19, 1997

 

 

By Senators KYRILLOS and CONNORS

 

 

A Joint Resolution creating the Task Force on the Availability of Homeowners Insurance in the Coastal Region.

 

Whereas, Over the past several years, homeowners and home buyers have experienced increased difficulty in obtaining personal property insurance, such as homeowners insurance, in the coastal areas of the State, and in particular, the barrier islands; and

Whereas, Beginning in 1993, storms causing millions of dollars in insured losses underscored the need for reliable personal property insurance, at the same time that some insurers began to restrict writing or nonrenew policies in those areas of the State hit hardest by the storms, namely those communities located between the Garden State Parkway and the Atlantic Ocean; and

Whereas, These practices constricted the coastal personal property and homeowners insurance market and forced many property owners into the State's property insurance pool of last resort, the New Jersey Insurance Underwriting Association, more commonly referred to as the "FAIR Plan," established by P.L.1968, c.129 (C.17:37A-1 et seq.); and

Whereas, In December of 1993, citing these conditions, the Legislature enacted a 90-day moratorium on the cancellation or nonrenewal of personal property insurance policies, including homeowners or secondary residence insurance policies, on the basis of proximity to water or the risk of windstorm related claims, in an effort to stabilize the market while the then Department of Insurance completed its study of this situation; and

Whereas, The voluntary program which resulted from that study, the Windstorm Market Assistance Program, only began operation on January 2, 1997, and there has been insufficient time to evaluate its effectiveness; and

Whereas, The market for personal property insurance, including homeowners insurance, in the coastal areas continues to be restricted and an unacceptably high number of risks continue to be insured in the Fair Plan; now, therefore,

 

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

    1. The Task Force on the Availability of Homeowners Insurance in the Coastal Region is hereby created and shall consist of 15 members to be appointed as follows: two members of the Senate to be appointed by the President thereof, both of whom shall represent coastal constituencies; two members of the General Assembly to be appointed by the Speaker thereof, both of whom shall represent coastal constituencies; the Commissioner of Banking and Insurance or her designee, who shall serve ex-officio; the Commissioner of Community Affairs or his designee, who shall serve ex-officio; and nine public members who are citizens of the State to be appointed by the Governor with the advice and consent of the Senate. Of the nine public members appointed, two shall represent insurers writing homeowners insurance in this State; two shall represent real estate brokers doing business in the coastal region of the State; two shall be licensed insurance producers authorized to transact property-liability insurance and doing business in the coastal region; two shall be homeowners with primary or secondary homes located in the coastal region; and one shall represent mortgage bankers doing business in the coastal region. The members shall be appointed within 60 days of the effective date of this joint resolution. Any vacancy in the membership of the task force shall be filled in the same manner as the original appointment was made.

 

    2. The task force shall organize as soon as may be practicable after the appointment of its members and shall select a chair from among its members and a secretary, who need not be a member of the task force. Members of the task force shall serve without compensation, but shall be reimbursed by the Department of Banking and Insurance for expenses actually incurred in the performance of their duties.

 

    3. The task force shall:

    a. Study and review the availability of personal property insurance in the coastal areas of this state;

    b. Study and review the voluntary Windstorm Market Assistance Program in order to evaluate its effectiveness in making homeowners insurance more readily available in the coastal region, including recommendations to improve its operations;

    c. Review and make recommendations to create incentives to encourage insurers to increase their voluntary writing of homeowners risks in the coastal areas, including, but not limited to, changes in insurers' rating systems that might be appropriate to mitigate losses and provide more accurate methods for ratemaking;

    d. Review and evaluate the extent to which there has been growth in the coastal areas, the degree to which local building codes are enforced effectively and how such growth and building code enforcement may affect insurance losses in the coastal areas;

    e. Review and evaluate incentives that may be offered to communities and homeowners to mitigate against potential losses that may occur in the event of a windstorm; and

    f. Review and compare other states with similar coastal area property insurance problems and evaluate the effectiveness of mechanisms those states have instituted to address issues of the availability of property insurance in the coastal regions of their states, as well as the appropriateness of considering the possible application of these mechanisms in New Jersey.

 

    4. The task force is entitled to the assistance and services of the employees of any State, county or municipal department, board bureau, commission or agency as it may require and as may be available to it for its purposes, and incur traveling and other miscellaneous expenses necessary to perform its duties, within the limits of funds made available to it for its purposes through the Department of Banking and Insurance.

 

    5. The task force may meet and hold hearings at the places it designates during the sessions or recesses of the Legislature and shall report its findings and recommendations to the Governor and the Legislature, no later than 180 days after the task force is organized.

 

    6. This joint resolution shall take effect immediately and shall expire upon the submission of the task force's report as required by section 5 of this joint resolution.

 

 

STATEMENT

 

    This joint resolution creates the Task Force on the Availability of Homeowners Insurance in the Coastal Region to study the availability of personal property insurance in the coastal region of the State. The task force will consist of 15 members, including four legislators representing coastal constituencies, the Commissioner of Banking and Insurance or her designee, the Commissioner of Community Affairs or his designee, and nine public members appointed by the Governor with the advice and consent of the Senate. The public members will include: two representatives of insurers writing homeowners insurance in this State; two representatives of real estate brokers doing business in the coastal region of the State; two representatives of licensed insurance producers doing business in the coastal region; two homeowners with primary or secondary homes located in the coastal region; and one representative of mortgage bankers doing business in the coastal region.


 

Creates Task Force on the Availability of Homeowners Insurance in the Coastal Region.