John D’Agostino Jr., President of The Professional Insurance Agents of New Jersey Inc., has written a letter to Douglas A. Wheeler, Assistant Commissioner of the state’s Department of Banking and Insurance, commenting on its proposals for new rules concerning alternate underwriting involving the phasing out of the state’s “take-all-comers” law.
“PIANJ supports the purpose of the proposal, that implements provisions of the new auto reform law which will phase out the take-all-comers requirement within five years and establish a voluntary rating tier in the Personal Automobile Insurance Plan for those who cannot get coverage in the voluntary market,” said D’Agostino.
The proposed rules would allow an insurer to use alternate underwriting rules for new business or cease writing new business in any rating territory where the insurer has met certain growth requirements. For calendar year 2004, the growth requirement for the previous 12 months is five percent and decreases to one percent in 2008. But it is also proposed that the Commissioner may reinstate take-all-comers upon finding a competitive market does not exist.
“To help eligible people who have been denied insurance in a rating territory where an insurer is using alternate underwriting rules or has ceased writing new business, the proposal states that they will be advised that coverage may be available to them from another insurer or that coverage is available in the VRT in PAIP,” said the letter.
The PIANJ said it generally supports the proposals, but asked the DOBI to clarify “a few issues.” D’Agostino said the “PIANJ would like to know whether insurance producers will first have to attempt to obtain coverage for a declined applicant from other insurers that they may represent before submitting business to the voluntary rating tier. It’s important to note that since many insurers use a five-day waiting period to obtain coverage and the VRT would likely provide immediate coverage, this difference could pose problems for consumers.”
The PIANJ also questioned provisions establishing a producer-eligibility program for the voluntary rating tier.
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