New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 1 - ADMINISTRATION
Subchapter 20 - RENEWAL, CANCELLATION AND NONRENEWAL OF COMMERCIAL AND HOMEOWNERS INSURANCE POLICIES
Section 11:1-20.5 - Cancellation or nonrenewal based on loss of or reduction in available insurance capacity
Universal Citation: NJ Admin Code 11:1-20.5
Current through Register Vol. 56, No. 18, September 16, 2024
(a) Every cancellation or nonrenewal based upon loss of or reduction in available insurance capacity shall be supported by the following documentation:
1. A narrative description of the specific
facts underlying the insurer's loss of or reduction in capacity.
2. Identification of the individual risk(s)
or line, class or subclass of insurance, as applicable, proposed for
termination and an explanation of the basis for the selection, which shall
demonstrate that the insurer's selection is not arbitrary, capricious or
unfairly discriminatory. An unsupported statement, such as "underwriting
judgment", shall not constitute a valid explanation.
3. With respect to terminations subject to
N.J.A.C. 11:1-22, an explanation of how the loss of or reduction in capacity
affects the insurer's risks throughout the line, class or category of insurance
proposed for cancellation and/or nonrenewal.
4. An explanation of why cancellation or
nonrenewal is necessary to cure the capacity problem and why other measures,
including but not limited to cessation of new business writings, do not present
a viable alternative to termination of existing business; and
5. With respect to terminations subject to
N.J.A.C. 11:1-22, an explanation of how the cancellation or nonrenewals will be
implemented with respect to individual risks and the steps that will be taken
to ensure that the cancellation/nonrenewal decisions will not be applied in an
arbitrary, capricious or unfairly discriminatory manner.
(b) Whenever an insurer proposes to cancel or nonrenew, on an individual basis, a policy which is subject to the provisions of this subchapter due to loss of or reduction in insurance capacity, the insurer shall furnish the Department with written notice of the termination. The notice shall include the information set forth at (a)1, 2 and 4 above and shall be mailed to the Department at the same time notice of termination is mailed or delivered to the insured.
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