N.J. Admin. Code § 11:3-1.4

Current through Register Vol. 56, No. 9, May 6, 2024

Section 11:3-1.4 - Governing Committee

(a) The AIP shall be administered by a Governing Committee of 18 members. No employee of a voluntary market automobile insurer that is not actively writing automobile insurance or that has filed and received approval of an application to withdraw from writing automobile insurance in New Jersey shall be eligible to serve as a member of the Governing Committee.

1. Eleven members shall be salaried employees of an insurer that is a participant in AIP.

2. Four members shall be licensed producers.

3. Two members shall be public representatives who are knowledgeable about automobile insurance matters but who are not employed by, or otherwise affiliated with, insurers, insurance producers, or other entities of the insurance industry.

4. The Commissioner shall be an ex-officio, non-voting member of the Governing Committee. The Commissioner may designate an alternate.

(b) The following organizations shall each nominate two members to represent insurer participants of AIP:

1. Property Casualty Insurers Association of America (PCI); and

2. The American Insurance Association.

(c) Insurers that are not members of the organizations in (b) above shall nominate two members to represent insurer participants in accordance with a fair method set forth in the AIP plan of operation.

(d) The following organizations shall each nominate two members to represent producers:

1. Independent Insurance Agents of New Jersey; and

2. Professional Insurance Agents of New Jersey.

(e) Five of the 18 members shall be representatives of one or more insurer participants in the organizations referenced in (b) above or of a non-member insurer participant as referenced in (c) above, to serve as at-large representatives. The five at-large members shall be nominated in accordance with the method set forth in the AIP plan of operation.

(f) All members shall be appointed by the Commissioner. All members shall serve for two years or until a successor is appointed. Each member may designate an alternate. In the event the Commissioner fails to appoint a nominee, the organization shall nominate another representative.

(g) All meetings of the Governing Committee shall be conducted in accordance with this subchapter and the AIP plan of operation.

(h) The Governing Committee shall have the following powers and duties:

1. To develop and submit for approval to the Commissioner:

i. A plan of operation;

ii. A rating system, including rates, rules, and forms; and

iii. A plan for a producer certification program, which may not exclude those producers with no affiliation with an insurer.

2. To appoint, conditionally appoint, or terminate:

i. An AIP manager, subject to approval by the Commissioner, which shall be located in this State, to be responsible for the conduct and administrative affairs of the AIP; and

ii. Other employees, professionals, and contractors required to administer the AIP.

3. To enter into and/or negotiate contracts as are necessary or proper to carry out the provisions of this subchapter;

4. To sue or be sued in the name of the AIP, including taking any legal actions necessary or proper for recovery of any assessments for, on behalf of, or against members. A judgment against the AIP shall not create any direct liability against the Governing Committee or its individual members, or the individual participating members of the AIP. The AIP shall not be liable for claims made on or pursuant to individual policies issued through the AIP;

5. To budget expenses, levy assessments, and disburse funds;

6. To investigate complaints and hear appeals from applicants, insureds, producers, LAD carriers, CAIP servicing carriers, or insurers about any matter pertaining to the proper administration of the AIP;

7. To arrange for the independent audit of the AIP each year;

8. To furnish all insurers with:

i. An annual written operations report;

ii. The approved annual budget upon request;

iii. A copy of the annual audit upon request;

iv. A copy of the plan of operation and all amendments;

v. A copy of all policy forms, rates, rules, and manuals upon request; and

vi. A copy of the minutes from all meetings upon request;

9. To audit the records of any insurer relating to the subject matter of AIP and establish such policies, records, books of account, documents, and related material, which shall be maintained for the proper administration of AIP;

10. To indemnify each member of the Governing Committee and AIP employees for any and all claims, suits, costs of investigations, cost of defense, and settlements or judgments against them on account of an act or omission in the scope of the member's duties or employee's employment. The AIP shall refuse to indemnify if it is determined that the act or failure to act was due to actual fraud, willful misconduct, or actual malice;

11. To appoint from among its members or from qualified nonmembers appropriate legal, actuarial, claims, and other committees as necessary to provide technical assistance in the operation of the AIP, policy and other contract design, and any other function within the authority of the AIP. The Commissioner may serve as an ex-officio, non-voting member of any committee established pursuant to this section (except an appeals subcommittee). The Commissioner may designate an alternate;

12. To assume the assets and liabilities of the CAIP on behalf of the member insurers;

13. To assume the rights and obligations of the CAIP on behalf of the member insurers; and

14. To perform such other functions as may be necessary and proper to administer AIP in accordance with this subchapter and the approved AIP plan of operation.

N.J. Admin. Code § 11:3-1.4

Adopted by 50 N.J.R. 565(a), effective 1/16/2018