N.J. Admin. Code § 11:2-35.5

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:2-35.5 - Relief

(a) When the Commissioner determines that fulfillment of a FAIR Act obligation or obligations set forth at N.J.A.C. 11:2-35.3(a) or (b) will result in the insurer being or becoming in an unsafe or unsound financial condition, or that an insurer is currently in an unsafe or unsound financial condition, the Commissioner shall order relief from the obligation(s) as set forth in (b) and (c) below.

(b) Except as provided at (c) below, the Commissioner shall order that insurer's duty to fulfill the applicable FAIR Act obligation be suspended or excused pending quarterly review of the insurer's financial condition.

(c) Where the Commissioner has granted an insurer relief from payment of assessments or surtaxes pursuant to N.J.S.A. 17:30A-8a(9) or N.J.S.A. 17:33B-49, as applicable, the Commissioner shall order that the insurer's obligation be exempted, abated or deferred, as follows:

1. Except as provided at (c)2 below, the Commissioner shall in all cases order that the insurer's obligation be deferred pending a quarterly review of the insurer's financial condition. The deferral shall be deemed to be an exemption two years from the date the obligation was originally due, unless the Commissioner, prior to that date, determines that the insurer's financial condition has improved such that payment of the obligation, or a portion thereof, will not result in the insurer's financial condition being or becoming unsafe or unsound. If an insurer is required to pay a portion of its obligation prior to the expiration of the two-year period, the remainder shall be deferred, and shall be deemed exempt at the expiration of the two-year period in the same manner as provided in this paragraph for deferred obligations.

2. The Commissioner shall order that the insurer's obligation be exempted, and thus no obligation thereafter shall be deemed to exist for the particular obligation for which the exemption was granted, if the insurer is in liquidation pursuant to N.J.S.A. 17:30C-8, or similar statute of the insurer's state of domicile, at the time the request is made. The Commissioner shall also grant an exemption if the insurer is in rehabilitation or conservation pursuant to N.J.S.A. 17:30C-6 or 17:30C-11, or similar statute of the insurer's state of domicile. The Commissioner shall also grant an exemption if payment of the obligation would result in the insurer being in a hazardous financial condition as determined in accordance with N.J.A.C. 11:2-27. An exemption granted under this paragraph to an insurer shall be for the entire obligation and no obligation thereafter shall exist for the particular obligation for which the exemption was granted; provided that the determination whether to grant an exemption from a future obligation shall be considered at the time such obligation becomes due based on the insurer's financial condition at that time.

3. The Commissioner shall order that the insurer's obligation to pay the full amount of the assessment or surtax be abated if he or she determines that payment of some amount will not result in the insurer's financial condition being or becoming unsafe or unsound. The amount which is not abated shall be deferred in the same manner provided by (c)1 above.

N.J. Admin. Code § 11:2-35.5

New Rule, R.1993 d.24, effective 1/4/1993.
See: 24 New Jersey Register 3212(a), 25 New Jersey Register 138(a).