DEPARTMENT OF BANKING AND INSURANCE
DIVISION OF INSURANCE
Eligible Persons Qualifications and Automobile Insurance Eligibility Points Schedule
Proposed Amendments: N.J.A.C. 11:3-34.5
Authorized By: Donald Bryan, Acting Commissioner, Department of Banking and Insurance
Authority: N.J.S.A. 17:1-8.1, 17:1-15e; and 17:33B-13 and 14.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2002-45
Submit comments by March 23, 2002 to:
Karen Garfing, Assistant Commissioner
Department of Banking and Insurance
20 West State Street
P.O. Box 325
Trenton, New Jersey 08625-0325
Fax: (609) 292 -0896
The agency proposal follows:
In accordance with the obligations established in N.J.S.A. 17:33B-14, the Commissioner established rules for the determination of automobile insurance eligibility points. These rules and the schedule of automobile insurance eligibility points are found at N.J.A.C. 11:3-34.5 and the Appendix to N.J.A.C. 11:3-34. From time to time, the Department of Banking and Insurance ("Department") reviews the application of these provisions because it is critical that all private passenger automobile insurance policies be adequately and fully rated to reflect the exact number of insurance eligibility points that should be assessed in rating each policy. Additionally, nine or more eligibility points accumulated by one individual will render that person ineligible in the voluntary market, which adds even greater significance to the adequate computation and accumulation of eligibility points.
The Department has recently determined that there is some confusion regarding the application of the rules pertaining to moving violations not specifically referenced in the Schedules found in the Appendix.
Specifically, the Department notes that certain moving violations occurring on the New Jersey Turnpike, the Atlantic City Expressway, the Garden State Parkway and other locations are not specifically mentioned in the Subchapter 34 Appendix. The purpose of this amendment then is to add subsection (f) to N.J.A.C. 11:3-34.5 to provide that the Subchapter 34 Appendix Schedules 1 and 2 shall be consulted for identification and determination of the specific number of insurance eligibility points to be assessed for moving violations occurring on the Turnpike, Atlantic City Expressway, Parkway and other locations.
This rule proposal provides for a comment period of 60 days, and therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, is not subject to the provisions of N.J.A.C. 1:30-3.1 and 3.2 governing rulemaking calendars.
The primary social impact of this proposed amendment will be to allow for the proper determination and assessment of insurance eligibility points which are used in accordance with N.J.A.C. 11:3-34 in the assessment of eligibility for coverage in the private passenger automobile insurance market and for calculation of the total number of rated insurance eligibility points. This amendment should have a beneficial impact on insurers who will be better able to ensure that only eligible persons obtain coverage in the voluntary market and all policies are adequately rated. Ultimately, this will result in a healthier insurance pool that will inure to the benefit of the general public.
The proposed amendment will positively impact on insurers and members of the general public. Consistent with the intent of N.J.S.A. 17:33B-13 and 14, insurers will be able to properly determine and assess insurance eligibility points. To the extent that all risks are properly rated, insurance premiums should stabilize and the negative impact of non-rated risks on insurers and the general public will abate.
Federal Standards Statement
A Federal standards analysis is not required because this amendment regulates the business of automobile insurance, which is governed by Title 17 of the New Jersey Statutes, and is not subject to any Federal requirements or standards.
N.J.S.A. 52:14B-4(a)(2) requires that all notices of proposal to amend rules include a "jobs impact statement which shall include an assessment of the number of jobs to be generated or lost if the proposed rule takes effect."
In accordance with this statutory obligation, the Department has conducted a review of the foreseeable impact that the adoption of these amendments will have on jobs in the State of New Jersey. No demographic, scientific or work force development studies are available. However, the Department does not believe that these rules will have a negative impact on jobs creation. Additionally, to the extent that the proposed amendments will allow insurers to properly and adequately rate all risks, the increased efficiency in the insurance marketplace may encourage new insurers to enter this State, thus creating new jobs.
Agriculture Industry Impact
The Department anticipates that the proposed amendment will have no impact on State agriculture industry.
Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act, N.J.S.A. 52:14B-17, a "small business" is any business resident in this State that employs fewer than 100 employees; is independently owned and operated; and is not dominant in its field. A few New Jersey automobile insurers meet this definition. The Department notes that certain moving violations occurring on the New Jersey Turnpike, the Atlantic City Expressway, and the Garden State Parkway are not specifically mentioned in the Subchapter 34 Appendix. Subchapter 34 Appendix violations assign automobile eligibility insurance points based on Title 39 of N.J.S.A. The New Jersey Turnpike, Atlantic City Expressway and Garden State Parkway violations are included in Title 19 of the Administrative Code and Title 27 of N.J.S.A. The purpose of these amendments is to clarify that motor vehicle violations that take place on these roads are assigned the corresponding automobile insurance eligibility points, based on the violation as described in the Appendix. All private passenger automobile insurers may incur some costs associated with the proper calculation of an insuredís insurance eligibility points. This amendment will permit insurers to properly and adequately rate all risks. The Department does not believe that these amendments impose any undue burden on any small businesses in that they are not being treated any differently than any other insurer. For this reason, and to ensure consistency in the application of these amendments, the proposed new rules provide no differentiation in compliance requirements based on an insurerís size.
Full text of the proposal follows, (additions indicated in boldface thus):
11:3-34.5 Automobile insurance eligibility points
(a) - (e) (No change.)
(f) In addition to the motor vehicle violation and insurance eligibility points specifically enumerated on Schedule 2 of the Appendix pertaining to the New Jersey Turnpike, Atlantic City Expressway, and the Garden State Parkway, for any other motor vehicle violations that occur on the New Jersey Turnpike (N.J.A.C. 19:9), the Atlantic City Expressway (N.J.A.C. 19:2-2.1), the Garden State Parkway (N.J.A.C. 19:8) or for any other moving violation at any location, Schedules 1 and 2 shall be consulted for identification of the specific misconduct committed and the determination of the appropriate number of insurance eligibility points to be assessed.