All that lobbying and demonstrating has apparently begun to pay off for New Jersey’s insurance community (See IJ Website Mar.18), as the state’s Senate Commerce Committee unanimously passed an amended version of S.B. 1999, the auto insurance reform bill supported by the insurance industry, which is now headed to the Senate floor.
“We’re hoping the bill passes out of the Senate this week, and that we can get a special meeting of the Assembly Banking and Insurance Committee to get things moving,” stated Donald S. Cleasby, assistant vice president and assistant general counsel for the National Association of Independent Insurers. “Although the amended bill represents a compromise between legislators and insurers, it does include all key areas supported by the insurance industry, including ‘take all comers,’ excess profits, rating, withdrawal, and territorial rating,” he continued.
The proposed changes include:
— Maintaining $250,000 as the default coverage limit for PIP.
— Inserting language saying that costs incurred by the Property and Liability Insurance Guaranty Association for the UCJF can be passed on to insurance consumers.
— Adding language on withdrawal, effective Jan. 1, 2007, which calls for an informational filing with the Department on the insurer’s withdrawal plan.
— Requiring the Department to update and redraw the state’s rating territories within 90 days of the Act’s effective date.
The Governor’s substitute bill included the following amendments:
— Eliminating the “take all comers” requirement by January 1, 2009, giving the insurance commissioner the authority to reinstate the provision if the private passenger auto insurance market is not competitive.
— Retaining prior approval for any overall rate increase that exceeds 7 percent and expanding expedited rating for increases from 3 to 7 percent.
— Establishing an excess profits calculation that will consider actuarial gains for a seven, rather than three, calendar-accident-year period and giving the insurance commissioner more regulatory flexibility in establishing criteria for underwriting income, actuarial gain, excess investment income and development adjustment.
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