Current through Register Vol. 56, No. 18, September 16, 2024
(a) In
accordance with
17:37A-21, the Commissioner shall,
on or before April 1, determine the net value of the New Jersey Insurance
Development Fund (Fund), as of the immediately preceding December 31. Upon
finding that the net value of the Fund is less than five percent of the
premiums written on basic property insurance, as that term is defined in
17:37A-2, in this State for the
calendar year immediately preceding, the Commissioner shall, pursuant to
17:37A-20 and 21, prescribe by
Order the amount of the policy premium surcharge, which, pursuant to
17:37A-19, authorized property
insurers are obligated to collect from the insured under any policy of basic
property insurance. The amount of the surcharge shall be established by the
Commissioner in the Order, but the aggregate amount of the surcharge shall not
exceed five percent of the premiums written on basic property insurance in this
State in the most recent calendar year. Upon determining that the net value of
the Fund equals or exceeds five percent of the premiums written on basic
property insurance in this State for the calendar year immediately preceding,
the Commissioner shall order that the imposition and collection of the
surcharge be terminated.
1. Any Order issued
by the Commissioner shall set forth the Commissioner's findings of fact with
respect to his or her determination of the net value of the Fund and the amount
of the surcharge.
i. The Commissioner shall
establish the amount of any surcharge, so as to replenish the Fund to a level
equal to five percent of the premiums written on basic property insurance in
this State within a reasonable time.
2. The essential terms of the Order shall be
published in the New Jersey Register.
(b) Application of the surcharge when ordered
by the Commissioner shall be as follows:
1.
The surcharge shall be imposed in an amount prescribed in an Order of the
Commissioner on premiums of the following policies and endorsements effective
on or after the date fixed by the Commissioner in his or her Order.
i. All fire, extended coverage and other
allied lines coverage (property damage and time element) written under the fire
policy.
ii. All burglary and theft
policies.
iii. Commercial multiple
peril policies. For the purpose of this computation, insurers shall utilize the
premium as reported for commercial multiple peril (non-liability portion) in
the Exhibit of Premiums and Losses in the annual statement filed pursuant to
17:23-1.
iv. Policies issued under the homeowners
policy program. For the purpose of this computation, 85 percent of the
homeowners premium shall constitute the premium subject to surcharge, except
that on individual risks where such percentage appears unreasonable, a company
may use actual division by line provided the company maintains a separate
record on those risks.
2. The surcharge shall apply to all new and
renewal policies effective on or after the date fixed by the Commissioner in
his or her Order and to the additional premiums on all endorsements effective
on or after that date.
3. Policies
written for a term longer than one year with an effective date on or after the
date fixed by the Commissioner in his or her Order shall be surcharged in
accordance with this section.
4.
Return of the surcharge is permitted on policy activity, such as endorsement
decreasing premium and cancellations effective on or after the date fixed by
the Commissioner in his or her Order.
5. For policies with an effective date on or
after the date fixed by the Commissioner in his or her Order, which are subject
to audit, the surcharge shall be based on the audited premium.
6. The surcharge shall be charged in full.
Insurers may round the amount of the surcharge to the nearest whole
dollar.
7. Commissions and premium
taxes shall not be payable on the surcharged amount and the insurer is
prohibited from absorbing such surcharge as an inducement for insurance or for
any other reason.
(c)
The surcharge shall be collected by each insurer and paid over to the State
Treasurer of New Jersey not later than March 1 and September 1 of each
year.
(d) On bills for premiums,
the surcharge shall be a separate charge to the insured in addition to the
premium to be paid, shall be shown separately from any Guaranty Association
charge and shall be identified as "IDF Surcharge" or such other designation as
the Commissioner may advise insurers is acceptable.
