DEPARTMENT OF BANKING AND INSURANCE
DIVISION OF INSURANCE
Rate Intervenor Rules
Definition of Substantial Contribution; Procedures for Intervening in a Rate Filing
Proposed Amendments: N.J.A.C. 11:3-17.2 and 17.6.
Authorized By: Karen L. Suter, Commissioner, Department of Banking and Insurance
Authority: N.J.S.A. 17:1-8.1, 17:1-15e, 17:29A-46.7 and 46.8
Proposal Number: PRN 2001-346
Submit comments by September 19, 2001 to:
Fax: (609) 292 -0896
On May 19, 1998, the Automobile Insurance Cost Reduction Act, P.L. 1998, c. 21, was enacted into law. N.J.S.A. 17:29A-46.8 requires the Commissioner of the Department of Banking and Insurance ("Commissioner") to establish standards and procedures for qualifying persons to intervene in rate filings filed by an automobile insurer writing private passenger automobile insurance in this State.
The Department of Banking and Insurance ("Department") adopted rate intervenor rules that will appear in the August 6, 2001 New Jersey Register at 33 N.J.R. 2694(a).
During the comment period to the rate intervenor proposal, there were two suggestions made by commenters that the Department wanted to incorporate into the adoption, but could not do so because the changes were too substantive in nature. Therefore, the Department is now proposing amendments to N.J.A.C. 11:3-17.2 and 17.6 in response to the comments. The Department is amending N.J.A.C. 11:3-17.2 by adding a definition of "substantial contribution." The proposed amendment clarifies and defines what "substantial contribution" means as used in this subchapter.
The Department is also proposing an amendment to N.J.A.C. 11:3-17.6(b) to require the intervenor to notify the Department and the filer of its intention to continue intervention within seven days after receipt of the copy of the rate filing. If the intervenor fails to do so, the Notice of Intention to Intervene is deemed withdrawn.
The proposed amendments define what constitutes "substantial contribution" for the purposes of establishing the standard that must be met by an intervenor in order to be awarded advocacy and witness fees and expenses pursuant to N.J.A.C. 11:3-17.7. The proposed substantial contribution standard informs intervenors of the burden that must be met by the intervenorís participation in order for the Commissioner to award reasonable advocacy and witness fees and expenses. They also require the intervenor to advise the Department and filer of its continued involvement in the rate filing.
The proposed amendments will impact intervenors by clarifying that their participation in a rate filing must result in a "substantial contribution" to the adoption of any Order or Decision by the Commissioner or Court on the rate filing, in order to be awarded reasonable advocacy and witness fees and expenses as determined by the Commissioner. These amendments also require the intervenor to notify the Department and the filer, once it has reviewed the rate filing, of its intention to continue to intervene.
Insurers will be impacted by these rules to the extent that if an intervenor makes a substantial contribution and then is awarded fees and costs, the filer must pay the awarded fees and costs.
Federal Standards Statement
A Federal standards analysis is not required because the proposed amendments concern insurance and are not subject to any Federal standards or requirements.
The Department does not anticipate that jobs may be generated as a result of these amendments.
Agriculture Industry Impact
Pursuant to P.L. 1998, c. 48, the Right to Know Law and N.J.S.A. 52:14B-4(a)(2) of the Administrative Procedure Act, the Department does not expect any agriculture industry impact from these new rules.
Regulatory Flexibility Analysis
It is expected that most of the persons or entities who register as intervenors will be "small businesses" as that term is defined in the New Jersey Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. The proposed definition of "substantial contribution" imposes no compliance requirements. The purpose of the proposed amendments to N.J.A.C. 11:3-17.6 is to require the intervenor to notify the Department and the filer of its intention to continue intervention within seven days after receipt of the copy of the rate filing, or its notice of invention with respect to the filing is deemed withdrawn. The cost of compliance for the intervenor is discussed in the Economic Impact above. No need for additional professional services in order to comply with this amendment is anticipated. Given the minimal nature of the notice requirement, no differing requirement is provided based on business size.
Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]:
The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise:
. . .
"Substantial contribution" means that the intervenor substantially contributed, as a whole, to the Commissionerís Final Decision and Order on the rate filing, by presenting relevant issues, evidence or arguments which were separate and distinct from those emphasized by the Department of Banking and Insurance staff or any other party, such that the intervenorís participation resulted in more relevant credible, and nonfrivolous information being available for the Commissioner to make his or her decision than would have been available to the Commissioner had the intervenor not participated.
11:3-17.6 Procedures for intervening in a rate filing
(a) (No change.)
(b) An intervenor shall notify the Department and the filer in writing, by mail or fax of its intent to intervene no later than 15 days after the Departmentís receipt of the rate filing, An intervenor may request and then shall receive a copy of the rate filing and any amendments and supplements thereto and shall pay the cost of copying and mailing as provided by N.J.S.A. 47:1A-2. Notice to the Department shall be sent to:
New Jersey Department of Banking and Insurance
Attention: Auto Unit/Rate Intervenor
20 West State Street
P.O. Box 325
Trenton, NJ 08625-0325
Fax: (609) 777-0019
If the intervenor does not notify the Department and the filer of its intention to continue intervention within seven days after receipt of the copy of the rate filing, its notice of intention to intervene with respect to that filing is deemed withdrawn.
(c) - (d) (No change.)