While commending New Jersey Gov. James McGreevey (D) for signing into law on Monday important auto insurance reform legislation, the Alliance of American Insurers (AAI) warned those who want to attract and keep good auto insurance companies in the state that the job is far from finished.
“The new law [S 63/A 2625] is a good step toward making auto coverage more available in New Jersey,” said Richard Stokes, government affairs representative for the Alliance’s Northeast Region. “However, the New Jersey auto insurance market has been distressed for nearly three decades and these reforms, while groundbreaking for this state, are not revolutionary. The harm done over 30 years won’t be reversed tomorrow, or even next week. It will take time for the market to stabilize under these positive changes, and will require determination by regulators to stick to the legislature’s intent of improving the competitive nature of the market.”
Stokes added that, “the collaborative process that brought about enactment of these reforms makes me optimistic that we have entered a new era of understanding between all stakeholders that will lead to further successes in improving the stability of the state’s long-suffering auto insurance market. For the job of repairing New Jersey’s auto insurance system is far from over, and the Alliance is committed to working with public officials in completing that job.”
He also warned against efforts to turn back reform. He noted that A 3531, aimed at increasing the number of lawsuits arising from minor injuries was held at the last minute by the state Assembly and could “rear its head at any time. Such efforts by the plaintiff bar highlight the fact that proponents of available, affordable auto insurance in New Jersey will need to continue to be vigilant against attempts to derail reform efforts.”
The new law institutes a reported long-needed framework for the rate review process that should ensure prompt and objective consideration of insurers requests, and phases out the take-all-comers provision. In addition, it maintains the personal injury protection default provision of $250,000, permits insurers to charge the Property/Liability Insurance Guaranty Association cost of the assessment to consumers and establishes criteria for withdrawing from the New Jersey market.
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