FROM: DONALD BRYAN, ACTING COMMISSIONER
RE: CANCELLATION AND NON RENEWAL OF COMMERCIAL PROPERTY AND CASUALTY INSURANCE AND CHANGES IN PREMIUM AND/OR COVERAGE UPON RENEWAL
This Bulletin is to remind all commercial property and casualty insurers about the procedures for cancellation and non- renewal of commercial property and casualty insurance and the prohibition against mid-term premium changes and/or reductions in the amount of coverage. The Department is aware that insurers may be reviewing their in force policies as a result of the events of September 11, 2001.
N.J.A.C. 11:1-20.2 specifies the notice requirements for cancellation and non-renewals and also for changes to premiums and/or policy terms at the time of renewal.
N.J.A.C. 11:1-20.3 states that commercial policies cannot be cancelled or non-renewed for any underwriting reason or guideline that is arbitrary, capricious or unfairly discriminatory or without adequate prior notice to the insured.
N.J.A.C. 11:1-20.4 establishes underwriting guidelines for cancellation and non-renewal.
This provision details the various approved circumstances under which insurers may cancel or non-renew policies and outlines circumstances where other underwriting guidelines may be used.
N.J.A.C. 11:1-22.2 specifically prohibits mid-term premium increases and/or reductions in the amount of coverage provided under the policy unless prior written approval has been obtained from the Commissioner.
All commercial property and casualty insurers are advised that the Department will be closely monitoring companies for compliance with these regulations and attempts to implement new procedures contrary to these requirements. The Department may impose penalties for deviation from the rules.
11/9/01 /s/Donald Bryan, Acting Commissioner