Bill Text: NJ S370 | 2014-2015 | Regular Session | Introduced
Bill Title: Clarifies policyholder notice requirements as well as Rate Counsel jurisdiction regarding certain prior approval insurance rate filings seeking rate increase.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-01-14 - Introduced in the Senate, Referred to Senate Commerce Committee [S370 Detail]
Download: New_Jersey-2014-S370-Introduced.html
STATE OF NEW JERSEY
216th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION
Sponsored by:
Senator NICHOLAS P. SCUTARI
District 22 (Middlesex, Somerset and Union)
SYNOPSIS
Clarifies policyholder notice requirements as well as Rate Counsel jurisdiction regarding certain prior approval insurance rate filings seeking rate increase.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning certain prior approval insurance rate filings and amending P.L.2005, c.155.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 48 of P.L.2005, c.155 (52:27EE-48) is amended to read as follows:
48. Division of Rate Counsel; jurisdiction.
The Division of the Rate Counsel shall have the authority to conduct investigations, initiate studies, conduct research, present comments and testimony before governmental bodies, issue reports, and produce and disseminate consumer guides on any matters that fall within the Rate Counsel's jurisdiction. The Rate Counsel shall also have the authority to represent the public interest as set forth below.
a. Utilities. The Division of Rate Counsel may represent and protect the public interest as defined in section 12 of this act in proceedings before and appeals from any State department, commission, authority, council, agency, or board charged with the regulation or control of any business, industry, or utility regarding a requirement that the business, industry, or utility provide a service or regarding the fixing of a rate, toll, fare, or charge for a product or service. The Division of Rate Counsel may initiate any such proceedings when the director determines that a discontinuance or change in a required service or a rate, toll, fare, or charge for a product or service is in the public interest.
b. Insurance; limited jurisdiction. The Department of the Public Advocate shall represent and protect the public interest with respect to insurance matters through the Division of Rate Counsel, which may represent and protect the public interest as defined in section 12 of this act in significant proceedings that pertain solely to prior approval rate increases for personal lines property casualty coverages or Medicare supplemental coverages. The Division of Rate Counsel shall have no jurisdiction or authority to participate or intervene in (1) expedited prior approval rate filings made by an insurer or affiliated group of insurers pursuant to section 34 of P.L.1997, c.151 (C.17:29A-46.6) or section 3 of P.L.2001, c.409 (C.17:36-5.35), or (2) prior approval rate filings of seven percent or less, except that when an insurer or affiliated group of insurers has filed for one or more prior approval rate filings for implementation within a 12-month period, and the impact of the filings is a combined overall increase of more than seven percent, this subsection shall apply to the filing which causes the combined overall increase to exceed seven percent, or (3) rule or form filings for any other form of insurance.
In determining, in his or her discretion, whether a proceeding is significant, the Director of the Division of Rate Counsel shall consider the following factors:
(1) the overall dollar impact of the requested increase, considering the filer's market share and the magnitude of the requested rate change;
(2) whether the increase, if granted, will increase the filer's rates significantly above market norms;
(3) whether the filer is advancing a significantly different alternate ratemaking methodology to the standard methodology established pursuant to section 8 of P.L.1988, c.119 (C.17:29A-36.2);
(4) whether the insurer is experiencing financial difficulties at its present rate level, as evidenced by the filing of rehabilitation proceedings, recent downgrading by insurance rating services, or significant losses reported on the filer's public financial statement.
Upon the effective date of this act, the Director of the Division of Rate Counsel in the Department of the Public Advocate shall, in addition to the powers set forth in this act, have the express authority to intervene in public hearings pursuant to section 66 of P.L.1998, c.21 (C.17:29A-46.8).
(cf: P.L.2005, c.155, s.48)
2. Section 50 of P.L.2005, c.155 (52:27EE-50) is amended to read as follows:
50. Division of Rate Counsel; required notices to the division.
The Division of Rate Counsel
shall receive a copy from the filer of any prior approval rate filing seeking
consumer insurance rate increases, including any amendments or supplements
thereto. A copy of such rate filing shall be received by the Division of Rate
Counsel concurrent with any rate filing with the Commissioner of Banking and
Insurance; except, however, the filer is not required to provide a copy of such
rate filing with the Division of Rate Counsel if: (a) the filing is an
expedited prior approval rate filing made pursuant to either section 34 of
P.L.1997, c.151 (C.17:29A-46.6) or section 3 of P.L.2001, c.409 (C.17:36-5.35);
or (b) the filing is made pursuant to any statutory change in coverage provided
under a policy of private passenger automobile insurance; or (c) the filing is
a prior approval rate filing of seven percent or less, except that when an
insurer or affiliated group of insurers has filed for one or more prior
approval rate filings for implementation within a 12-month period, and the
impact of the filings is a combined overall increase of more than seven
percent, this section shall apply to the
filing which causes the combined overall increase to exceed seven percent.
(cf: P.L.2005, c.155, s.50)
3. Section 51 of P.L.2005, c.155 (52:27EE-51) is amended to read as follows:
51. Division of Rate Counsel; public notices of certain consumer insurance rate increases.
The Division of Rate Counsel and the Department of Banking and Insurance may publish on their respective official websites, to the extent practicable, as the case may be: (a) notice of all filings for consumer insurance rate increases; (b) all requests for hearing dates for such increases; and (c) the date or dates a hearing is to be held. The Division of Rate Counsel and the Department of Banking and Insurance, pursuant to regulations established by the Division of Rate Counsel, shall establish operational links such that each respective website may be accessed from the other. Publication on the applicable website shall take place within three business days of the applicable notice of filing, request for hearing, and date or dates of hearings.
If an insurer or rating organization files for a personal lines prior approval rate increase, excluding rating system changes made pursuant to P.L.1997, c.151 (C.17:29A-46.1 et seq.), the insurer or ratings organization shall, in conjunction with such filing, notify the public of the proposed rate change; except, however, the filer is not required to notify the public of the proposed rate change if the rate increase pertains to: (a) an expedited prior approval rate filing made pursuant to either section 34 of P.L.1997, c.151 (C.17:29A-46.6) or section 3 of P.L.2001, c.409 (C.17:36-5.35); or (b) a rate filing made pursuant to any statutory change in coverage provided under a policy of private passenger automobile insurance; or (c) a prior approval rate filing of seven percent or less, except that when an insurer or affiliated group of insurers has filed for one or more prior approval rate filings for implementation within a 12-month period, and the impact of the filings is a combined overall increase of more than seven percent, this section shall apply to the filing which causes the combined overall increase to exceed seven percent.
Such notice shall be communicated through regular or electronic mail to the named policy holders who use the products and services subject to the rate increase, within seven business days of the applicable filing and shall conform to a form prescribed by the Department of Banking and Insurance pursuant to regulations established in conjunction with the Rate Counsel.
(cf: P.L.2005, c.155, s.51)
4. This act shall take effect immediately.
STATEMENT
This bill clarifies policyholder notice requirements, as well as Rate Counsel jurisdiction, regarding certain prior approval insurance rate filings seeking rate increase.
Specifically, this bill requires an insurer to provide policyholders with notice of certain prior approval rate filings, whenever any such filing, combined with any previously approved filing within a 12-month period, will result in an increase in insurance rates by more than seven percent in that 12-month period. Currently, insurance providers are permitted to file rate increase requests with the Department of Banking and Insurance that are not subject to any policyholder notification, provided that such filings contain a request to increase premium rates by no more than seven percent. However, the department has encountered several situations in which insurers have submitted multiple requests for rate increases within a 12-month period, the aggregate effect of which has been more than seven percent, but which did not trigger any notice requirement because no one filing met the seven percent threshold.
This bill also provides the Division of Rate Counsel with the right to receive prior notice of an insurer's rate filings in the same fashion, along with jurisdiction to participate or intervene in the department's review of such requests.
