Current through Register Vol. 56, No. 6, March
18, 2024
(a) In order
for an applicant to be granted a certificate of authority to transact property
and casualty insurance in this State or, in the case of reciprocal insurance
exchanges, to be issued a permit to solicit pursuant to
17:50-10, the requirements of this
section shall be satisfied in addition to any other requirements in this
subchapter or any other provision of law.
(b) Any applicant seeking to obtain a
certificate of authority to transact property and casualty insurance in this
State or, in the case of reciprocal insurance exchanges, seeking to obtain a
permit to solicit pursuant to
17:50-10, shall first submit a
feasibility study to the Commissioner which shall include, but not be limited
to, the following:
1. A detailed plan of
operation of the applicant which shall:
i.
Include and explain its plans of operation;
ii. Explain its source of funding;
iii. Describe its marketing
strategy;
iv. Describe its
underwriting procedures and guidelines;
v. Explain the administrative and legal
arrangements to be made for the adjustment of claims and the recovery of
salvage and subrogation;
vi.
Describe its territory of operation;
vii. Describe the qualifications of the
senior officers of the applicant responsible in the areas of claims,
underwriting and investment;
viii.
Describe the proposed maximum amount of coverage by line of business;
ix. Describe the proposed retention by line
of business;
x. Describe the
proposed reinsurance arrangements;
xi. Describe the proposed methods for the
handling of consumer complaints;
xii. Include the applicant's proposed
organization chart; and
xiii.
Describe the proposed dividend policy;
2. A summary of the applicant's initial
rating system to the extent its proposed operations are regulated which shall
include:
i. Rates by lines of
business;
ii. Proposed statistical
agents (if any);
iii. Independent
filings; and
iv. The rating bureau
(if any);
3. A five year
projection of the following certified by a qualified actuary and accompanied by
a narrative explaining the sources of anticipated premium and all assumptions
made in developing the entire projection:
i.
Assets, liabilities and surplus and other funds in the format of the Assets
page and the Liabilities and Surplus and Other Funds page in the Annual
Statement representing the start-up year of the applicant and the five
successive year-ends;
ii.
Underwriting and investment income in the format of the Underwriting and
Investment Exhibit, Statement of Income in the Annual Statement for each of the
five years;
iii. The following
information by line of business for each of the five years (the line of
business classifications shall be those set forth in the Underwriting and
Investment Exhibit, Part Two in the Annual Statement):
(1) Premiums earned;
(2) Losses incurred;
(3) Loss expenses incurred; and
(4) Ratios of the sum of the losses and loss
expenses to premium earned; and
iv. The projected values required in the
Underwriting and Investment Exhibit, Part Four--Expenses in the Annual
Statement; and
4. The
name of the proposed insurer or reciprocal insurance exchange which shall be
reviewed for acceptability by the Commissioner, and if acceptable, shall be
reserved for the time that such proposed insurer's or reciprocal insurance
exchange's application is pending.
(c) In addition to the requirements in (b)
above, the Commissioner may require any additional information he or she deems
necessary in order to make an adequate evaluation of the applicant.
(d) Each applicant shall submit a
non-refundable filing fee in the amount set forth in
11:1-32.6(a)1
with the filing of the information required by (b) above to cover costs of
Department review of such information.
(e) Within 60 days from the receipt of a
complete feasibility study and filing fee required by (b) and (d) above, the
Commissioner shall notify the applicant in writing that he or she either
accepts or rejects the applicant's feasibility study. If the Commissioner
notifies the applicant that the feasibility study is accepted, the applicant
shall comply with the additional information requirements set forth in
11:1-28.6.
