Senate Commerce Committee Statement to Senate, No. 2422 — State of New Jersey (May 16, 2022)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 2422, State of New Jersey, dated May 16, 2022, reporting the bill favorably. The bill updates the "New Jersey Life and Health Insurance Guaranty Association Act" to current standards from the National Association of Insurance Commissioners. It expands the assessment base for insolvencies of long-term care insurers so that all life and health insurers help cover them, where currently only life insurance companies that sell long-term care insurance are assessed. The bill sets a cap of $500,000 on health insurance benefits issued by the guaranty association in cases of insurer impairment or insolvency, proposed for adjustment by the health care costs component of the consumer price index from January 1, 2022.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
2422

STATE
OF NEW JERSEY

DATED: MAY 16,
2022

The
Senate Commerce Committee reports favorably Senate Bill No. 2422.

This
bill updates the “New Jersey Life and Health Insurance Guaranty Association
Act” to current standards from the National Association of Insurance
Commissioners.

Among
the updates in the bill is an expansion of the assessment base that is to cover
the insolvencies of long-term care insurers. All life and health insurers will
be required to assist in covering these insolvencies. Currently, assessments
are made against all health insurance companies, even if the company does not
sell long-term care insurance, but only those life insurance companies that
sell long-term care insurance are assessed.

Additionally,
this bill sets the cap at $500,000 on health insurance benefits issued by the
guaranty association in cases of insurer impairment or insolvency. This cap is
proposed for adjustment based upon changes in the health care costs component
of the consumer price index from January 1, 2022, to the date on which the
member insurer, as defined in the bill, becomes an insolvent insurer.

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