The National Association of Independent Insurers has roundly approved the recent action by the New Jersey Senate in passing a bill that will bring the state in line with the rest of the country by eliminating a requirement that surplus lines insurers must file all forms with the insurance department.
“This is a major accomplishment brought about through a concerted effort of NAII and the surplus lines industry in New Jersey,” stated the NAII’s senior director and counsel Michael G. Koziol. NAII appreciates the support given by Senate leadership last week, and ongoing support by the Assembly leadership and the insurance department.”
The NAII said that the Bill, S.B. 1991, “is expected to go before the full Senate and Assembly later this month or next. Upon passage, New Jersey would join all other jurisdictions in having some level of freedom of form for surplus lines insurers.”
The announcement noted that “currently, the surplus lines broker must file the forms as submitted by the surplus lines insurer. This can result in delays or problems in the approval process – a critical delay considering that insureds often turn to the surplus lines market days or even hours before coverage must be in place.”
“It just does not make sense in this day and age to have surplus lines forms regulated,” Koziol concluded. “For surplus lines companies to operate effectively as the alternative market, they need to respond quickly to difficult coverage issues. Freedom of form is part of the process.”
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