Sponsored by:
Senator JENNIFER BECK
District 11 (Monmouth)
SYNOPSIS
Requires auto and homeowners insurers to have review process to ensure premium rate quotes are not unfairly discriminatory.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain insurance rates and supplementing P.L.1998, c.21 (C.39:6A-1.1 et al.) and P.L.2001, c.409 (C.17:36-5.33 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Every insurer writing private passenger automobile insurance in this State shall have a process in place to review, upon the request of an insured or prospective insured, an automobile insurance premium rate quote provided by the insurer to determine whether the rate quote is arbitrary, unfairly discriminatory, significantly disproportionate in terms of the number of exposures per territory, or does not measure the relativity of exposure to probable loss, in a manner that is inconsistent with the rating requirements provided pursuant to section 26 of P.L.1998, c.21 (C.17:29A-48). If the insurer determines that a quoted premium rate is inconsistent with the requirements of section 26 of P.L.1998, c.21 (C.17:29A-48), the carrier shall issue a new quote that is consistent with that section.
2. Every insurer writing homeowners insurance in this State shall have a process in place to review, upon the request of an insured or prospective insured, a premium rate quote provided by the insurer to determine whether the rate quote unfairly discriminates between risks in this State involving essentially the same hazards and expense elements, in a manner that is inconsistent with the rating requirements provided pursuant to section 4 of P.L.1944, c.27 (C.17:29A-4). If the insurer determines that a premium rate quote is inconsistent with the requirements of section 4 of P.L.1944, c.27 (C.17:29A-4), the carrier shall issue a new quote that is consistent with that section.
3. This act shall take effect on the first day of the fourth month following enactment.
STATEMENT
This bill requires insurers writing private passenger automobile insurance or homeowners insurance to have in place a process to, upon the request of an insured or prospective insured, review a premium rate quote provided by the insurer to determine whether the rate quoted is consistent with current laws that require rates to be determined based on risk, and that prohibits rates that are arbitrary or unfair. If the insurer determines that a premium rate quote is inconsistent with those laws, the carrier must issue a new quote.
Section 26 of P.L.1998, c.21 (C.17:29A-48) provides, among other things, that every insurer writing private passenger automobile insurance in this State have a rating territory that does not result in territories which are arbitrary, unfairly discriminatory, or significantly disproportionate in terms of the number of exposures per territory. Section 4 of P.L.1944, c.27 (C.17:29A-4) requires every insurer which makes its own rates to make rates that are not unreasonably high or inadequate for the safety and soundness of the insurer, and which do not unfairly discriminate between risks in this State involving essentially the same hazards and expense elements.