N.J. Admin. Code § 11:3-1.9

Current through Register Vol. 56, No. 19, October 7, 2024

Section 11:3-1.9 - Determination and fulfillment of PAIP quotas

(a) With respect to PAIP risks only, the Governing Committee shall establish procedures in the plan of operation to distribute risks eligible for coverage to insurers on an equitable basis based on the proportion that the insurer's share of the voluntary market for personal private automobile insurance relates to the Statewide total of the voluntary market for personal private passenger automobile insurance in the State.

1. The PAIP shall not provide insurance coverage for more than 10 percent of the aggregate number of private passenger automobile non-fleet exposures being written in the total private passenger automobile insurance market in this State.

2. The PAIP shall cease acceptance of applications for new policies upon certification by the Commissioner that the Plan has reached or exceeded 10 percent of the private passenger automobile non-fleet exposures.

3. The PAIP shall resume acceptance of applications for new policies upon certification by the Commissioner that the PAIP is insuring less than 10 percent of the aggregate number of private passenger automobile non-fleet exposures being written in the total private passenger automobile market in the State.

4. Each insurer shall receive credit against its respective portion of assigned risks for private passenger automobile risks written voluntarily in the State that are garaged in the urban enterprise zones (UEZs). Such credits shall be in an amount established in the AIP plan of operation.

5. In order to encourage the writing of risks in traditionally underserved areas, the PAIP shall, in its allocation of credits as set forth in the AIP plan of operation, consider the loss ratio of the municipality, identified by zip code, in which the risk is located. The loss ratios for municipalities shall be established by the Department from data compiled by the statistical agents and shall be included in the AIP plan of operation.

6. No insurer whose surplus, as regards policyholders, is less than $ 1,500,000, as reported on page three of the most recent statutory annual statement, shall be assigned a risk requesting or required by law to carry limits of liability in excess of 50/100/10 or in excess of a combined single limit of $ 100,000.

(b) An insurer that issues only policies that provide physical damage coverage shall not be subject to assignments from the PAIP, but shall be entitled or obligated, as the case may be, to receive or pay a cash settlement of its obligation, in lieu of receiving assignments, for the current year, in accordance with procedures established by the Governing Committee in the AIP plan of operation.

(c) Each insurer or statistical agencies designated by such insurers shall report to the AIP manager all data necessary to comply with the distribution procedures. Each insurer shall permit its statistical agent to release such data to the AIP manager and shall permit its statistical agent to furnish the AIP manager with statements of its AIP experience.

(d) There shall be no exceptions to the type or class of risks assigned to an insurer other than as provided in this subchapter nor shall there be any agreement with an insurer to refrain from assigning risks in any territory or area of the State.

(e) The PAIP shall not suspend assignments to an insurer for any period of time, for any reason, other than a suspension of insurer obligations granted by the Commissioner pursuant to N.J.S.A. 17:33B-23 and 17:33B-24 and N.J.A.C. 11:2-35. The AIP shall promptly notify all insurers of such action.

(f) If an insurer is ordered or permitted to discontinue writing automobile insurance in this State in accordance with an informational filing withdrawal pursuant to N.J.A.C. 11:2-29, or other Order of the Commissioner, or Order by a court of competent jurisdiction, the insurer's obligations to pay assessments, receive assignments, and run-off existing business shall be pursuant to such Order of the Commissioner or Order of a court of competent jurisdiction.

(g) In the event an insurer is merged with another insurer, there is a consolidation of insurers, or an insurer acquires another insurer's book of business, the continuing insurer shall receive the assignments and assessments of the insurer merged, consolidated, or acquired until the quota of such merged, consolidated, or acquired insurer, as established by its writings prior to such merger, consolidation, or acquisition has been filled; provided, however, the continuing insurer may be relieved from such obligations if another insurer has agreed, in a manner satisfactory to the Governing Committee, to assume such obligations.

(h) Groups of insurers under the same ownership and management shall be treated as a single insurer. Groups of insurers under either the same ownership or management, but not both, may elect to be treated either separately or as a single company.

(i) The Governing Committee shall establish procedures in the AIP plan of operation permitting an insurer by mutual agreement to transfer its obligations to accept assignments to another insurer (to be known as a LAD carrier). The basic contract to be entered into between insurers and LAD carriers, including the minimum duration of such agreement, shall be approved by the Governing Committee and the Commissioner. Any substantive modifications to the approved contract shall be submitted to the Governing Committee and Commissioner for approval prior to its use. With respect to the transfer of an insurer's obligations to accept assignments to a LAD carrier, the plan shall address the following:

1. Eligibility criteria for an insurer to act as a LAD carrier and accept additional assignments;

2. The maximum number of additional assignments a LAD carrier may assume;

3. Minimum provisions for contracts between insurers and LAD carriers, including the minimum time duration for such contracts;

4. The parameters for fees to be paid to LAD carriers by the participating insurer for the assumption of the insurer's assigned risk quota;

5. Procedures by which the allocation of assignments to LAD carriers are adjusted to reflect additional assignments as a result of entering into a contract to assume additional assigned risks; and

6. Any other procedures deemed necessary to provide for a LAD carrier distribution system.

N.J. Admin. Code § 11:3-1.9

Adopted by 50 N.J.R. 565(a), effective 1/16/2018