BULLETIN NO. 02-20

TO: ALL INSURERS WRITING AUTO INSURANCE IN THIS STATE AND OTHER INTERESTED PERSONS

FROM: HOLLY C. BAKKE, COMMISSIONER

RE: DRIVER LICENSE SUSPENSIONS BY NEWARK MUNICIPAL COURT

At the request of the Administrative Office of the Courts, the Department of Banking and Insurance ("Department") is advising insurers that all license suspensions issued by the Newark Municipal Court (Court code 0714) with the dates of September 13 and 20, 2002 in the event column of the Driver Record Abstract have been rescinded by Court Order and should not be used in the determination of whether an insured is an eligible person or to rate policies. Insurers are requested to communicate this information to their producers.

The Department is also reminding insurers that they are only permitted to cancel a policy because of the suspension or revocation of the insured's driver license when the suspension or revocation is the result of the conviction of one or more of the driving related offenses listed in N.J.A.C. 11:3-35.4(e)1. Suspensions for failure to pay parking tickets and other non-driving related conduct cannot be the basis for a policy cancellation. However, persons with suspended driving licenses should not be operating motor vehicles until their driving privileges are restored. A copy of N.J.A.C. 11:3-35.4(e) is attached to this Bulletin as Exhibit A.

Complaints to the Department of Banking and Insurance about policy cancellations or other problems related to this issue can be sent to:

Division of Insurance
Enforcement and Consumer Complaints
P.O. Box 329
Trenton, N.J. 08625-0329

Fax: (609) 292-5865


September 27. 2002 /s/ Holly C. Bakke, Commissioner

EXHIBIT A

 

New Jersey Administrative Code

PRIVATE PASSENGER AUTOMOBILE INSURANCE UNDERWRITING RULES

11:3-35.4

(e) Insurers may file for approval underwriting rules by which it cancels coverage during the policy term under a policy insuring an eligible person pursuant to N.J.S.A. 17:29C-7(A)(b) when the driver's license or motor vehicle registration of another named insured or person insured under the policy who either resides in the same household or customarily operates an automobile insured under the policy has been suspended or revoked. The Department may approve such underwriting rules if they include the following provisions:

1. The underwriting rules provide for the cancellation of the policy when the driver's license or motor vehicle registration is suspended or revoked for one or more of the following reasons:

i. Conviction of operating a motor vehicle under the influence of alcohol or drugs (N.J.S.A. 39:4-50);

ii. Conviction of refusal to submit to a chemical test (N.J.S.A. 39:4- 50.4);

iii. Conviction of vehicular homicide (N.J.S.A. 2C:11-2);

iv. Conviction of operating a motor vehicle while driving privilege is suspended (N.J.S.A. 39:3-40);

v. Conviction of operating a motor vehicle without liability insurance (N.J.S.A. 39:6C-2);

vi. Conviction of misrepresentation of insurance coverage (N.J.S.A. 39:6A-15);

vii. Accumulation of motor vehicle penalty points pursuant to N.J.S.A. 39:5-30.5; or

viii. By a court upon conviction of one of the following motor vehicle violations: racing on a highway (N.J.S.A. 39:5C-1); failure to pass to right of vehicle proceeding in opposite direction (N.J.S.A. 39:4-84); tailgating (N.J.S.A. 39:4-89); reckless driving (N.J.S.A. 39:4-96); exceeding a speed limit by 30 MPH or more (N.J.S.A. 39:4-99); improperly passing a school bus (N.J.S.A. 39:4-128.1); or leaving the scene of an accident in which personal injury occurred (N.J.S.A. 39:4-129).

2. The underwriting rules provide for the cancellation of the policy when:

i. A household member is convicted of a violation of N.J.S.A. 39:6B-2 during the policy term; or

ii. Other evidence exists indicating that the suspended or revoked driver has been operating a vehicle during a period of suspension as outlined in 1 above.

3. The underwriting rules provide that coverage for eligible persons shall not be cancelled when the driver's license or motor vehicle registration of another named insured or any other operator insured under the policy is suspended or revoked for any reason other than those set forth in (e)1 above.