Senate Commerce Committee Statement to Senate, No. 479 — State of New Jersey (June 20, 2022)

Summary

The Senate Commerce Committee of the State of New Jersey, in a statement dated June 20, 2022, reports favorably Senate Bill No. 479, which eliminates the New Jersey Automobile Insurance Risk Exchange (AIRE). The statement says AIRE was created by statute to compensate insurer members for certain non-economic loss claims and claim adjustment expense, membership is required for every insurer licensed to write private passenger automobile insurance in New Jersey, and all AIRE assessments, expenses and costs are paid by New Jersey automobile insurance companies. Savings an insurer realizes from eliminating AIRE, as determined by the Commissioner of Banking and Insurance, must be deposited into the "Pedestrian Safety Enforcement and Education Fund."

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
479

STATE
OF NEW JERSEY

DATED: JUNE
20, 2022

The
Senate Commerce Committee reports favorably Senate Bill No. 479.

This
bill eliminates the New Jersey Automobile Insurance Risk Exchange.

The
New Jersey Automobile Insurance Risk Exchange (AIRE) was created by statute for
the purpose of compensating insurer members of the exchange for claims paid for
non-economic loss and claim adjustment expense which would not have been
incurred had the less costly tort limitation option provided under statute been
elected by the injured party filing a claim for non-economic loss.

Membership
in AIRE is required for every insurer licensed to transact private passenger
automobile insurance in New Jersey, including all applicable residual market
mechanisms. All AIRE assessments, expenses and costs are paid by New Jersey
automobile insurance companies.

The
bill provides that any savings realized by an insurer licensed to transact
private-passenger automobile insurance in this State through the elimination of
AIRE, as determined by the Commissioner of Banking and Insurance, are required
to be deposited into the "Pedestrian Safety Enforcement and Education
Fund," and to be used to alleviate pedestrian safety problems.

This
bill was pre-filed for introduction in the 2022-2023 session pending technical
review. As reported, the bill includes the changes required by technical
review, which has been performed.

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