CHAPTER 5: NJIUA (fair plan)

Question 1

NJIAU Fair Plan: PURPOSE

Answer 1

Make ESSENTIAL PROPERTY ins. available to ind. with an insurable intrest who CANNOT get ins. in the voluntary market `

Question 2

NJIUA: Limits of Application
l. Where
ll. Maximum Value Limit

Answer 2

Covers REAL PROPERTY or PERSONAL PROPERTY loc. in urban NJ

Insurable Value Limit: $1,500,000 maximum

Question 3

FAIR PLAN creation and membership

Answer 3

Creation: created to OPERATE fair plan

MEMEBERSHIP: MANDATORY MEMBERSHIP for all insures auth. to write property ins. in NJ

Question 4

NJ Commercial INS. Deregulation Act of 1982
Purpose (4)

Answer 4

1. Promote PRICE COMPETITION among insurers
2. PREVENT MONOPOLIES and destruction of competition
3. Encourage EFFICIENT, ECONOMIC RATES, and MARKETING PRACTICES
4. PROTECT the public against unfair, excessive, or inadequate rates.

Question 5

Rates and Subcharges

Answer 5

Insures collect a SUBCHARGE on basic property ins. policy
SUBCHARGE:
a. set ANNUALLY by commisioner
b. cannot exceed 5% of premium
Paid SEMIANNUALLY to the Nj Ins. Development Fund

Question 6

Where does NJ Commercial INS. Deregulation act of 1982
-apply
-exlcude

Answer 6

Applies to large, sophisticated commercial clients who don’t need as much regulatory protection.

🛑 Does not apply to personal lines or small business coverages.

Question 7

NJ Commercial INS. Deregulation Act of 1982
Purpose/ General Defintion

Answer 7

Purpose:
To allow more flexibility in setting rates and forms for certain commercial insurance policies — reducing prior approval requirements by the state.

Question 8

NJ Commercial INS. Deregulation Act of 1982: Filling Requirements (3)

Answer 8

1. RATES AND AMENDMENTS: must be filled with the COMMISSIONER NO LATER THAN 30 DAYS AFTER BECOMING EFFECTIVE
2. POLICY FORMS: must be filled AT LEAST 30 DAYS BEFORE COMING EFFECTIVE
3. PUBLIC ACCESS: all filling are PUBLIC and OPEN to INSPECT ANYTIME

Question 9

PSI tip NJ Commercial INS. Deregulation act of 1982 purpose

Answer 9

If the question mentions rate freedom or less regulation for commercial policies, it’s likely referencing this Act.

Question 10

NJCIDA of 1982: Rates Standards cannot be (3)

Answer 10

excessive, inadequate, unfairly discriminatory

Question 11

NJCIDA 1982 Rate Standards: factors to consider 4

Answer 11

1. Past & Potential losses
2. Casatrophe/ conflagration risk
   -inside + outside Nj-
3. Reasonable Profit
4. Policy hodlers divideneds (ifapplicable)

Question 12

NJCIDA of 1982: Insures option

Answer 12

Set own rates
Use/ mod rates from a rating orginizaiton

Question 13

NJCIRA of 1982: Special Risks inc (4)

Answer 13

1. high Hizard, unusual, excess or comportable risk
2. Com risk producing $10000 in annual prem (exc. med palpractice)
3. Insland Marine ins.
4. Difelity, surety, and forgery bonds

Question 14

NJCIRA of 1982: Special rules (2)

Answer 14

Detail underwriting, prem, loss, and exp. records must be kept

commisioner can AUDIT these rec. anytime

Question 15

PSI tip for special risks NJCIDA of 1982

Answer 15

If a question asks which policies are

exempt from filing rates/forms, the answer may be Special Risk policies under the 1982 Act.

Insurers can set custom rates and forms without state approval — giving them flexibility.