Current through Register Vol. 56, No. 24, December 18, 2024
(a) When the
Commissioner determines that fulfillment of a FAIR Act obligation or
obligations set forth at
N.J.A.C. 11:2-35.3(a) or (b) will result in the insurer being or
becoming in an unsafe or unsound financial condition, or that an insurer is
currently in an unsafe or unsound financial condition, the Commissioner shall
order relief from the obligation(s) as set forth in (b) and (c)
below.
(b) Except as provided at
(c) below, the Commissioner shall order that insurer's duty to fulfill the
applicable FAIR Act obligation be suspended or excused pending quarterly review
of the insurer's financial condition.
(c) Where the Commissioner has granted an
insurer relief from payment of assessments or surtaxes pursuant to N.J.S.A.
17:30A-8a(9) or
N.J.S.A. 17:33B-49, as applicable, the
Commissioner shall order that the insurer's obligation be exempted, abated or
deferred, as follows:
1. Except as provided
at (c)2 below, the Commissioner shall in all cases order that the insurer's
obligation be deferred pending a quarterly review of the insurer's financial
condition. The deferral shall be deemed to be an exemption two years from the
date the obligation was originally due, unless the Commissioner, prior to that
date, determines that the insurer's financial condition has improved such that
payment of the obligation, or a portion thereof, will not result in the
insurer's financial condition being or becoming unsafe or unsound. If an
insurer is required to pay a portion of its obligation prior to the expiration
of the two-year period, the remainder shall be deferred, and shall be deemed
exempt at the expiration of the two-year period in the same manner as provided
in this paragraph for deferred obligations.
2. The Commissioner shall order that the
insurer's obligation be exempted, and thus no obligation thereafter shall be
deemed to exist for the particular obligation for which the exemption was
granted, if the insurer is in liquidation pursuant to
N.J.S.A. 17:30C-8, or similar statute of
the insurer's state of domicile, at the time the request is made. The
Commissioner shall also grant an exemption if the insurer is in rehabilitation
or conservation pursuant to
N.J.S.A. 17:30C-6 or
17:30C-11, or similar statute of
the insurer's state of domicile. The Commissioner shall also grant an exemption
if payment of the obligation would result in the insurer being in a hazardous
financial condition as determined in accordance with N.J.A.C. 11:2-27. An
exemption granted under this paragraph to an insurer shall be for the entire
obligation and no obligation thereafter shall exist for the particular
obligation for which the exemption was granted; provided that the determination
whether to grant an exemption from a future obligation shall be considered at
the time such obligation becomes due based on the insurer's financial condition
at that time.
3. The Commissioner
shall order that the insurer's obligation to pay the full amount of the
assessment or surtax be abated if he or she determines that payment of some
amount will not result in the insurer's financial condition being or becoming
unsafe or unsound. The amount which is not abated shall be deferred in the same
manner provided by (c)1 above.
