Bill Text: NJ S2801 | 2016-2017 | Regular Session | Introduced
Bill Title: Prohibits use of lapse in automobile insurance coverage as rating factor in automobile insurance underwriting under certain circumstances.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-11-21 - Introduced in the Senate, Referred to Senate Commerce Committee [S2801 Detail]
Download: New_Jersey-2016-S2801-Introduced.html
Sponsored by:
Senator RAYMOND J. LESNIAK
District 20 (Union)
SYNOPSIS
Prohibits use of lapse in automobile insurance coverage as rating factor in automobile insurance underwriting under certain circumstances.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning private passenger automobile insurance rating plans and amending P.L.1997, c.151.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 15 of P.L.1997, c.151 (C.17:29A-46.2) is amended to read as follows:
15. a. Insurers shall put in writing all underwriting rules applicable to each rate level utilized pursuant to section 14 of P.L.1997, c.151 (C.17:29A-46.1). An insurer may take into account factors, including, but not limited to, driving record characteristics appropriate for underwriting and classification in formulating its underwriting rules; provided that :
(1) no underwriting rule based on motor vehicle violations shall be formulated in such a manner as to assign any named insured to a rating tier other than the standard rating tier applicable to the insured's territory solely on the basis of accumulating four motor vehicle points or less [. No] ;
(2) no underwriting rule shall operate in such a manner as to assign a risk to a rating plan on the basis of the territory in which the insured resides or any other factor which the commissioner finds is a surrogate for territory; and
(3) no underwriting rule shall operate in such a manner as to assign a risk to a rating plan on the basis that a previously insured applicant has had a lapse in automobile insurance coverage for a period exceeding 12 months, when the lapse is solely based on no-need to be a named insured under an automobile insurance policy. For the purposes of this paragraph, the previously insured applicant may establish that the lapse is based solely on no-need to be a named insured if all of the following criteria are met:
(a) the applicant did not have any duty under section 1 of P.L.1972, c.197 (C.39:6B-1) to have an automobile insurance policy;
(b) the applicant was not convicted of driving without insurance in violation of section 2 of P.L.1972, c.197 (C.39:6B-2) during a lapse in coverage;
(c) the lapse was not the result of a termination of an automobile insurance policy due to a failure to pay the premiums due under the policy;
(d) the lapse was not the result of the applicant's attempt to misrepresent their driving record due to earlier accidents or convictions;
(e) the lapse was not due to a motor vehicle violation; and
(f) the lapse was not caused by an offense prosecuted under the "New Jersey Insurance Fraud Prevention Act," P.L.1983, c.320 (C.17:33A-1 et seq.).
An insurer which knowingly fails to transact automobile insurance consistently with its underwriting rules shall be subject to a fine of not less than $1,000 for each violation.
b. All underwriting rules applicable to each rate level as provided for in section 14 of P.L.1997, c.151 (C.17:29A-46.1) shall be filed with the commissioner and shall be subject to his prior approval. All underwriting rules shall be subject to public inspection. Except as provided in subsection d. of section 27 of P.L.1990, c.8 (C.17:33B-15), insurers shall apply their underwriting rules uniformly and without exception throughout the State, so that every applicant or insured conforming with the underwriting rules will be insured or renewed, and so that every applicant not conforming with the underwriting rules will be refused insurance.
c. An insurer with more than one rating plan for private passenger automobile insurance policies providing identical coverages shall not adopt underwriting rules which would permit a person to be insured for private passenger automobile insurance under more than one of the rating plans.
d. An insurer that revises its underwriting rules with respect to the assignment of insureds to rating tiers based on the number of accumulated motor vehicle points, as provided by subsection a. of this section, as amended by P.L.2003, c.89, shall certify to the commissioner that the revised rule will produce rates that are revenue neutral based upon the insurer's current coverages and book of business.
(cf: P.L.2003, c.89, s.40)
2. This act shall take effect on the 90th day next following enactment.
STATEMENT
This bill prohibits a private passenger automobile insurance company from using an underwriting rule to assign a risk to a rating plan on the basis that a previously insured applicant has had a lapse in automobile insurance coverage for a period exceeding 12 months, when the lapse is solely based on "no-need" to be a named insured under an automobile insurance policy.
Under the bill, the previously insured applicant may establish the lapse is based solely on no-need to be a named insured if all of the following criteria are met:
(1) the applicant did not have any duty under section 1 of P.L.1972, c.197 (C.39:6B-1) to have an automobile insurance policy;
(2) the applicant was not convicted of driving without insurance;
(3) the lapse was not the result of a termination of an automobile insurance policy due to a failure to pay the premiums due under the policy;
(4) the lapse was not the result of the applicant's attempt to misrepresent their driving record due to earlier accidents or convictions;
(5) the lapse was not due to a motor vehicle violation; and
(6) the lapse was not caused by an offense prosecuted under the "New Jersey Insurance Fraud Prevention Act," P.L.1983, c.320 (C.17:33A-1 et seq.).
