The New Jersey Senate’s Commerce Committee is in the midst of vetting two key bills that would have significant impact on the Garden State’s insurance industry.
One bill would create a create a financial backstop for homeowners in the event of a significant natural catastrophe. That bill, known as the New Jersey Consumer Catastrophe Catastrophe Preparedness and Protection Act (S-2089), was first introduced to the Senate Commerce Committee in October by Democratic Majority Leader Stephen Sweeney.
The proposed legislation would create a private catastrophe fund to enhance first-responder programs and provide a financial backstop to assure the ability of New Jersey homeowners to quickly recover following a hurricane or other catastrophe. The backstop would replace a portion of reinsurance that companies purchase to cover large losses.
In testimony this week, John Forney, managing director with Raymond James & Associates Inc., said that “the catastrophe management solution in this bill will help make homeowners insurance more available and affordable for New Jersey consumers. With $92 million saved in insurance premiums each year, families and communities will have capacity to recover more quickly and effectively in the aftermath of catastrophe.”
The bill is supported by ProtectingAmerica.org, a 4-year-old nonprofit comprised of emergency management officials, first responders, disaster relief experts, insurers and others that work to establish state and local catastrophe management strategies.
Lawmakers are also vetting a bill that would temporarily ban the use of credit scoring by personal lines insurers. The ban would go through at least June 2011. That bill was introduced earlier this week by introduced this week by Sen. Nia Hill (D-Montclair), chairman of the Commerce Committee, which discussed the bill this week.
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