New Jersey Department of Banking and Insurance
Holly C. Bakke Commissioner
FOR IMMEDIATE RELEASE: June 3, 2002
FOR FURTHER INFORMATION: MARY CAFFREY or PETER HARTT (609) 292-5064
AUTO WORKING GROUP ISSUES UPDATE
TRENTON - Banking and Insurance Commissioner Holly C. Bakke today announced that the Department will take immediate action to protect consumers on six items raised by the Auto Working Group, convened this spring to address problems in New Jersey’s auto insurance market.
Today, the group met to assess the status of its work. A series of "issue identification" sheets prepared by the group spell out areas members believe need immediate attention and were provided to the Commissioner. "These issue sheets represent a collaborative effort by varied interests and gave the competing interests involved in the auto insurance system an opportunity to lay out their points of view," Commissioner Bakke said. "The issues raised will start the dialogue for the next part of the job, identifying those ways in which we can work to ensure that New Jersey’s auto insurance system best serves consumers."
Commissioner Bakke emphasized that today’s update is an important milestone, but it is not the end of the process. "Never before has the State of New Jersey engaged in such a thorough effort to identify all the issues facing New Jersey’s auto insurance system, bring all voices to the table, and begin a dialogue on real and lasting solutions for New Jersey drivers."
"As Governor McGreevey has said, New Jersey needs an auto insurance system that is fair and predictable. The Governor believes strongly that good drivers should not pay for bad drivers," Commissioner Bakke said.
"I am appreciative of the work the Auto Working Group has produced to date. Many, many issues have been raised. While we are taking quick action on some items, the real value of today’s ‘issue identification’ papers will be seen in the dialogue that follows," Commissioner Bakke said.
Also, Commissioner Bakke appeared at today’s Working Group meeting to report on conditions in the auto insurance market and said that she will work with the industry and all interested parties if legislation is needed to ensure a stable marketplace for consumers.
Group members, which represent the insurance industry, attorneys, medical providers and an advocate for injury victims, took part in three panels that examined the Existing System, ways to create a Competitive Marketplace, and what a New System would look like. Not surprisingly, five of the six items that will get immediate attention were issues raised by the Existing System panel. The Department will:
From the beginning, the Auto Working Group has been given the charge of "all options are on the table." Today, the group pointed to the need for a comprehensive study that will compare the cost of New Jersey’s current no-fault system to a fault-based system. Rolando Torres Jr., Special Deputy Commissioner for Auto Insurance, said there has been considerable debate about whether the state should keep no-fault or scrap it. "Our concern is whether consumers pay more or less," Torres said.
This study, to be conducted by the Insurance Service Organization, will provide much-needed objective data to guide the debate. "Change is about making choices, and you can’t make choices without information. We want to provide the best possible information to guide the debate," Torres said.
Commissioner Bakke said the panel will undertake continued study of the high cost of medical care for those seriously hurt in auto accidents, how to make better use of alternate dispute resolution techniques, and ways to expand the range of affordable options for consumers. The Commissioner said she has one more requirement: "The system must provide a range of affordable options for consumers."
Both Commissioner Bakke and Special Commissioner Torres know the work ahead will be difficult. "You can’t touch one part of the system without affecting every piece," Torres explained. "To do our job well, we must take an integrated approach. That’s why we will continue to seek feedback on any regulatory changes."