NJDOBI E-Newsletter
The State of New Jersey
NJ Department of Banking and Insurance

Home > June 2011
 
DOBI Makes Regulatory Changes, Streamlines Oversight in Many Areasline

One of the top priorities of Governor Chris Christie’s Administration is to make New Jersey more business friendly and to increase private sector jobs. A major component of that is eliminating or revising overly-burdensome, unnecessary or duplicative rules that prevent the creation of jobs and discourage investment.

The Department of Banking and Insurance has embraced the Administration’s pro-business agenda. Commissioner Considine’s approach has been to work with business, streamline the regulatory process and make the Department as adept at promoting the growth and stability of the businesses it regulates as it is at protecting consumers.

“We accomplished a great deal in the first year of Governor Christie’s administration,” Considine said. “But our work has just begun. There is much more to do in implementing the Governor’s agenda of reducing red tape and creating a business friendly atmosphere that encourages job growth while continuing to protect consumers.”

The Department made approximately twenty regulatory changes that streamlined oversight while continuing to protect consumers. In addition, DOBI worked with the legislative body on a number of bills to better the economic status of the Garden State. They include:

   
  Captive Insurance Legislation
line
  P.L. 2011, c. 25 allows for the formation of captive insurance companies in New Jersey in the areas of life insurance, annuities, health insurance, indemnity, property and casualty, fidelity, guaranty, title and reinsurance, and will allow New Jersey companies to insure their risk in New Jersey. It also falls in line with the pro-growth Christie agenda. More information
   
  Reinsurance and Surplus Lines Legislation
line
  The Reinsurance and Surplus Lines Stimulus Act, recently signed by Governor Christie, will provide incentives for surplus line insurers and reinsurers that are financially sound to do business in New Jersey. This legislation removes the restriction that only non-domesticated companies can write surplus lines risk in New Jersey, thus allowing New Jersey companies to write New Jersey risk. Secondly, by allowing less restrictive reinsurance guidelines the Commissioner can approve the entry of new and healthy reinsurance writers into the State, bringing jobs and economic opportunities with them. More information
   
  Repealed TREE
line
  The Department repealed the Territorial Rating Equalization Exchange (TREE) regulation. After several years’ analysis of the market, the Department determined that the issues to be addressed through the TREE did not materialize. Following the removal of the “Take All Comers” provision in 2009, competition assured that coverage is available throughout the state. This regulation when proposed and adopted represented a “solution in search of a problem.” Considine described TREE as a burden on NJ businesses that amounted to “regulatory socialism.”
   
  Adopted and Strengthened GUDPA Rules
line
  The Department adopted new rules to implement amendments to the Governmental Unit Deposit Protection Act (GUDPA) which establishes collateral requirements for financial institutions that accept deposits of local New Jersey government funds. In addition to establishing collateral obligations for public depositories holding uninsured public funds, with the amount of collateral determined by the amount of uninsured public deposits held, the percentage of such funds held in branches in New Jersey, and the capital category of the depository, they also now provide for electronic submission of reports. These new rules will encourage a vibrant and diverse group of institutions to continue accepting governmental deposits. See GUDPA Update
   
  Added Consumer Protection Measures
line
  Commissioner Considine ordered that life insurance contracts that provide beneficiaries with alternative settlements to single check payments, known as Retained Asset Accounts, must now be under the State’s regulatory review. He also ordered enhanced disclosures including instances when these accounts are backed by the protection of State guaranty funds and not the FDIC.
   
  Reduced Approval Time
line
  The Department reduced by 30 percent the time period during which filings are considered for life and health insurance.
   
  Interstate Insurance Compact Legislation
line
  P.L.2010, c.120, signed by the Governor early this year, makes New Jersey a member of a national commission that develops uniform standards and consumer protections for asset-based insurance products, such as life insurance and annuities, and also establishes a clearinghouse for prompt review of those product filings. New Jersey is the 38th state to join the Compact. Consumers are afforded the protections built in by the Compact’s process that reflect best national practices. At the same time, all products approved by the Compact will become available in New Jersey, providing economic opportunities for companies.
   
  Mortgage Guaranty Insurance Legislation
line
  P.L.2010, c.93, signed by the Governor in November 2010, provides a temporary window in which the DOBI Commissioner may waive the statutory liability-to-surplus ratio requirement for sound mortgage guaranty insurance companies. This will provide a more accessible homebuyer’s mortgage market by allowing consumers a wider range of options when looking for mortgage guaranty insurance, also known as partial mortgage insurance, a prerequisite for mortgage borrowers who have not yet paid 20 percent of their mortgage.
 
 
state seal
Copyright © 2011, State of New Jersey
New Jersey Department of Banking and Insurance