Thursday’s announcement by Governor James McGreevey that Mercury General will begin selling automobile insurance in the Garden State confirms that the strong and positive message sent by the recent passage of the New Jersey Automobile Insurance Competition and Choice Act is attracting new companies and much needed capital to New Jersey’s long-troubled automobile insurance market says the Insurance Council of New Jersey (ICNJ).
“Today’s announcement confirms that New Jersey is indeed removing the barriers to competition that have plagued our state for decades,” said John Tiene, president of the Insurance Council of New Jersey. “The recent reform is a well-balanced foundation on which we are building a new vibrant, competitive automobile insurance market.”
Mercury General will be the first major insurer to enter New Jersey’s automobile insurance market in more than 30 years. In the last decade, more than 25 insurance companies have withdrawn from the state, seven companies departed just last year. Mercury has indicated that it is willing to commit up to $100 million in new capital to New Jersey’s ailing automobile insurance market.
“Much more work needs to be done to untangle the decades of complicated and burdensome regulations that have denied consumers choice and stifled competition,” continued Tiene. “This dramatic change in direction though would not have been possible without the Governor’s leadership.”
The legislation, known as Senate Bill 63/Assembly Bill 2625, was developed through the leadership of Governor McGreevey and reportedly received overwhelming bi- partisan approval in the Legislature this past spring. The reform law is intended to curb the state’s growing auto insurance availability crisis and spur market competition.
ICNJ also praised the efforts of Assemblymen Lou Greenwald (D-Camden) and Kip Bateman (R-Somerset) for their leadership in securing bi-partisan support and passage of the legislation in the General Assembly. In the Senate, Senators Ron Rice (D-Essex), Ray Lesniak (D-Union), Gerald Cardinale (R-Bergen) and Joe Kyrillos (R-Monmouth) were instrumental in that house’s bi-partisan vote on the legislation.
The comprehensive legislation has generated a flurry of activity. Since Governor McGreevey signed the legislation on June 9, 2003, more than a dozen regulatory proposals have been published by state regulators. These regulatory procedures provide the structure for implementing the legislation, slated to take effect on Jan. 1, 2004. Previous reforms have taken many years to fully implement, thus delaying the benefits of those reforms.
“As the many elements of the reform law are implemented, we expect consumers to see an increasingly competitive market,” continued Tiene. “New Jersey has long needed to modernize its regulatory approach to auto insurance, gain the confidence of market participants, and look to attract desperately needed capital from insurers. We appear to be well on the road to stability and competition.”
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