The American Insurance Association commended the New Jersey Senate Commerce Committee “for its leadership and bipartisan action in passing historic legislation (Senate Committee Substitute/Senate 63) aimed at bringing competition back into the state’s auto insurance market.”
“By passing this legislation, the Commerce Committee has acknowledged that it is time to address past problems and enact a pro-competitive reform package that will ultimately benefit New Jersey’s motorists,” said the bulletin.
“There is a serious capacity problem in New Jersey, which means that we must attract new insurers to the state. The Commerce Committee has taken a first step towards a real and viable solution to the availability crisis, recognizing that the legislature and the administration must work together on a bipartisan basis to enact substantial regulatory reform,” explained Tammy Velasquez, AIA assistant vice president, mid-Atlantic region. “Nothing less is acceptable and nothing less will fix this ailing system.”
The AIA particularly noted the positive effects of limiting New Jersey’s “take-all-comers” provisions and the so-called “excess profits” rule, that have made it very difficult for companies to obtain the capital they need to expand in or enter the New Jersey marketplace.
“While the legislation approved by the Committee includes several of the elements needed to address the systemic problems that have led to the state’s current auto insurance crisis, it still falls short of a long-term solution,” said the AIA. “For example, the Committee failed to recognize the need to eliminate underwriting controls, such as the urban enterprise zone (UEZ) requirements, and it also failed to encourage the Department of Banking and Insurance to act on the long over-due territory rating regulations.”
“More competition will mean more choices and better prices for consumers. This system is on the brink of disaster, and only New Jersey’s lawmakers can pull it back from the edge of the cliff,” Velasquez concluded.
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